China lithium giant picks banks for Hong Kong listing: sources

[HONG KONG] Tianqi Lithium, a Chinese supplier of the key material used in batteries, has selected banks for a share offering in Hong Kong that could take place as soon as mid-2022, according to people familiar with the matter.

The company, whose shares already trade in Shenzhen, is working with China International Capital, Morgan Stanley and CMB International on the proposed sale that could raise about US$1 billion to US$2 billion, the people said, asking not to be identified as the information is private.

Deliberations are ongoing and details such as the fundraising amount and timing could still change, the people said. A representative for CICC declined to comment, while Morgan Stanley, CMBI and Tianqi Lithium didn't immediately respond to requests seeking comment.

Shares of the company rose as much as 3.7 per cent on Friday (Jan 21) in Shenzhen, the biggest intraday gain in more than a week.

Tianqi Lithium applied for a Hong Kong listing in 2018, but the plan was shelved amid falling lithium prices and a cash squeeze following its purchase of a 24 per cent stake in a Chilean rival for about US$4 billion. The company's performance has improved since, as the global push for electrified transport has stoked demand for lithium, which is used in rechargeable batteries.

The Chengdu, Sichuan-based company has revived the stalled share sale plan as global prices for the raw material almost quadrupled in the past year. In September, the company said its board approved a proposal to issue H shares and list on the mainboard of Hong Kong's stock exchange. Chinese lithium carbonate has surged more than 25 per cent this month.

The resurgence in the consumption of the metal helped Tianqi Lithium return to profit for 2 quarters in a row last year. Share prices of Tianqi Lithium have more than doubled since end-March as it recovers from debt repayment pressures that forced the miner to sell stakes in the world's biggest lithium mine in Australia and in a refinery to IGO for US$1.4 billion.

BLOOMBERG