As China's largest power battery supplier, how to manage idle cash is a question CATL needs to think about.
CATL's board of directors has agreed that the company will use up to 5.5 billion yuan ($850 million) of idle funds for cash management and investment in wealth management products, it said in an announcement on Wednesday.
CATL raised RMB 19.7 billion through a private share offering to specific investors last year, and as of June 30, 2021, the uncommitted balance of the funds was RMB 6.8 billion, the announcement said.
CATL will invest in capital-protected investment products with high safety and liquidity, including wealth management products, structured deposits, time deposits or large certificates of deposit, with a holding period of no more than 12 months, the announcement showed.
The investment does not contradict the implementation plan of the fund-raising project, does not affect the normal conduct of the fund-raising project, and does not disguise the change of the investment of the fund-raising capital and damage the interests of shareholders, CATL said.
CATL's cash management of some of the idle fund-raising funds will help improve the efficiency of the company's use of funds and increase capital gains, which is in the interests of the company and all shareholders, the company said.
CATL had used up to RMB 11.98 billion of idle proceeds for cash management in July 2020. As of now, the outstanding balance of cash management is RMB 5.4 billion.
CATL's Shenzhen-listed shares have risen about 80% in the past four months.