China's BYD raises $5.1b in upsized share sale

Chinese electric vehicle manufacturer BYD, which is backed by American investor Warren Buffett, agreed to sell 133 million shares at HK$225 each, representing a 7.8 per cent discount to Wednesday's closing price of HK$244. The sale comes after BYD's
Chinese electric vehicle manufacturer BYD, which is backed by American investor Warren Buffett, agreed to sell 133 million shares at HK$225 each, representing a 7.8 per cent discount to Wednesday's closing price of HK$244. The sale comes after BYD's shares surged more than 400 per cent in the last 12 months in Hong Kong. PHOTO: XINHUA

NEW YORK • BYD, a Chinese electric vehicle manufacturer backed by American billionaire investor Warren Buffett, has raised HK$29.9 billion (S$5.1 billion) from an upsized sale of its Hong Kong-listed shares, capitalising on rising demand for new-energy vehicles and a blistering stock rally.

The company agreed to sell 133 million shares at HK$225 each, representing a discount of 7.8 per cent to Wednesday's closing price of HK$244, according to a statement.

The placed shares represent 14.54 per cent of its enlarged H-share base, the statement showed.

BYD had previously planned to offer 121.1 million shares at HK$222 to HK$228 each, according to terms of the deal obtained by Bloomberg News.

The offering comes after BYD's shares surged more than 400 per cent in the last 12 months in Hong Kong, part of a broader rally in electric vehicle (EV) maker stocks buoyed by strong investor expectations for the industry's growth.

BYD is the latest in a growing line of Chinese EV makers to tap capital markets for funding. Last year, they raised billions of dollars in share sales: Chinese rival Xpeng sold US$2.5 billion (S$3.3 billion) worth of new stock, while Nio fetched US$3.1 billion last month.

Xpeng also signed an agreement with banks for a US$2 billion line of credit earlier this year.

Electric car demand is increasing in China, benefiting industry leader Tesla, as well as its local contenders such as Nio and Xpeng that focus on the domestic market.

New energy vehicle retail sales rose 9.8 per cent last year to 1.11 million units, with a 58 per cent year-on-year jump last month to 206,000 units.

Shenzhen-based BYD plans to use the cash to replenish its working capital, repay interest-bearing debt, and invest in research and development, according to the filing.

It said last month that it planned to issue no more than 20 per cent of its total H shares outstanding.

UBS Group, Goldman Sachs Group and China International Capital Corp are joint global coordinators on the deal. Citic Securities is lead manager.

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A version of this article appeared in the print edition of The Straits Times on January 22, 2021, with the headline 'China's BYD raises $5.1b in upsized share sale'. Subscribe