Tesla Supplier Ganfeng Lithium Seeks $676 Million in Share Sale

(Bloomberg) -- Ganfeng Lithium Co., China’s top producer of the metal used in electric-vehicle batteries, seeks as much as $676 million from a first-time share sale in Hong Kong.

The Jiangxi-based company is offering 200.2 million shares at HK$16.50 to HK$26.50 apiece, according to terms for the deal obtained by Bloomberg. The price range represents a 29 percent to 56 percent discount to Ganfeng Lithium’s Tuesday closing price in Shenzhen.

Six cornerstone investors, including South Korean battery makers LG Chem Ltd. and Samsung SDI Co., have agreed to buy about $230 million of stock in the offering, the terms show.

Ganfeng Lithium said earlier this month it signed a three-year pact with Tesla Inc. to supply a fifth of its production to the U.S. electric car maker. Shares of Ganfeng Lithium have fallen 32 percent in Shenzhen trading this year through Tuesday.

China Structure Reform Fund has agreed to buy about $70 million of shares in Ganfeng Lithium’s offering as a cornerstone investor, while LG Chem and Samsung SDI each committed $50 million, according to Wednesday’s terms. Dongfeng Asset Management will invest $30 million, while carmaker FAW Group plans to buy 146 million yuan ($21 million) worth of stock and Chinese private equity firm GSR Capital committed 58 million yuan.

The company plans to price its offering Oct. 3 U.S. Eastern time and begin trading Oct. 11, the terms show. Citigroup Inc. is sole sponsor for the offering, according to a preliminary prospectus.

Lithium hydroxide prices in China have declined about 19 percent this year, according to Asian Metal Inc. data, partly on concern over potential for oversupply in the market and as China’s battery sector responds to changes in government subsidies that favor higher-quality producers. Global lithium prices have fallen about 5 percent, Benchmark Mineral Intelligence data show.

--With assistance from David Stringer.

To contact the reporter on this story: Crystal Tse in Hong Kong at ctse44@bloomberg.net

To contact the editors responsible for this story: Ben Scent at bscent@bloomberg.net, Timothy Sifert

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