Contemporary Amperex Technology Co. Ltd., the world’s largest maker of batteries for electric vehicles, is planning to limit the types of US investors that can participate in its Hong Kong listing, an indication that US-China tensions may be spilling into the IPO market.
CATL, as the Chinese company is known, decided to switch the share sale solely to a so-called Reg S offering that doesn’t allow sales to US onshore investors and exempts the issuer from certain US regulatory filing obligations, people familiar with the matter told Bloomberg News last week.
While most large US institutional investors also have offshore accounts, meaning they can still participate, the move will exclude some, such as domestic mutual funds with retail money. It is unusual for such a large share offering in Hong Kong not to be available to onshore US investors.
CATL decided on the change to limit its exposure to US legal liability, according to people familiar with the matter. It has enough demand even if some US investors are unable to participate in the listing, the people added, asking not to be identified as the information isn’t public.
A representative for CATL didn’t immediately respond to a request seeking comment outside of business hours.
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The battery maker has already found itself caught up in geopolitical tensions between the Washington and Beijing. CATL was included on a Pentagon blacklist in January, citing the company’s alleged links to the Chinese military. CATL has said the allegations are without merit and that it has never engaged in any military-related business or activities.
A US congressional committee last month called on the two lead US banks working on the listing, Bank of America Corp. and JPMorgan Chase & Co., to withdraw from the deal, citing concerns including the blacklist. Both firms are still working on the transaction.
CATL is planning to seek at least US$4 billion from its Hong Kong stock offering, Bloomberg News reported on Friday, which would make it the world’s biggest listing this year. The eventual proceeds could rise to US$5.3 billion if the deal is upsized and the overallotment exercised, both of which are likely to be implemented, people familiar with the matter have said. CATL may start taking investor orders as soon as Monday, they said.
At over US$4 billion, the share offering would more than double proceeds in Hong Kong’s market for listings this year, which Bloomberg Intelligence predicts will surge to US$22 billion. The bonanza’s been driven by Chinese companies going ahead with their listing plans in the Asian financial hub despite the turmoil brought on by US President Donald Trump’s tariffs, which have caused many deals to be postponed in America and Europe.
