Chinese Lithium Giant Tests Investor Demand for Hong Kong IPO

The firm filed a revised prospectus on June 19 after passing a list listening to in Hong Kong and earlier receiving approval from China’s securities regulator to promote shares within the Asian monetary hub. It is predicted to cost its IPO on July 6 and begin buying and selling July 13, the folks acquainted with the deal stated. The ultimate deal dimension might change relying on investor demand.

Tianqi Lithium is making an attempt to tug off a big fundraising at a time when global demand for IPOs has been depressed. Surging U.S. inflation, quickly rising rates of interest, Russia’s invasion of Ukraine and uncertainty in regards to the world financial outlook have helped gasoline a worldwide inventory selloff, which has pushed new stock-issuance volumes decrease.

Hong Kong’s market has been hit particularly hard; within the year-to-date interval, corporations have raised a complete of $2.4 billion in new and secondary inventory listings within the metropolis, down greater than 90% in worth from the identical interval a yr earlier, in accordance with Dealogic information.

Tianqi Lithium, which has been in enterprise for round 30 years, makes lithium compounds and derivatives in China and owns and mines lithium minerals in Australia, in accordance with its prospectus. The steel is utilized in rechargeable batteries and has been in demand for electric-vehicle production. It can also be used to make glass, ceramics and different forms of spinoff merchandise.

The firm beforehand utilized to listing in Hong Kong in 2018 and had aimed to lift the same quantity on the time to assist pay for a minority stake that it purchased that yr in a Chile-based lithium production and distribution company known as SQM. The IPO ended up being shelved, regardless that it acquired a inexperienced gentle from the China Securities Regulatory Commission.

The proceeds from the approaching share sale in Hong Kong could be used to repay debt that Tianqi Lithium nonetheless has from that $4 billion Chilean mining deal, in addition to to fund the development of a lithium carbonate manufacturing plant within the Anju district of China’s Sichuan province.

The Shenzhen-listed shares of Tianqi Lithium and certainly one of its important rivals,

Ganfeng Lithium Co.

, have considerably outperformed the broader Chinese inventory market during the last two years, thanks partially to surging demand for the compounds they produce.

Tianqi Lithium’s income greater than doubled to the equal of $1.13 billion in 2021 and the corporate reported a revenue of $626 million, swinging from a year-earlier lack of $167 million.

—Cao Li contributed to this text.

Write to Dave Sebastian at dave.sebastian@wsj.com