CATL will invest in principle-guaranteed investment products with high security and liquidity to improve the efficiency of capital use and increase returns.
For Contemporary Amperex Technology Co Ltd (CATL, SHE: 300750), which has just secured tens of billions of RMB in financing, it is a challenge to manage the temporarily unused funds.
CATL will invest up to 23 billion yuan ($3.4 billion) of its recently raised funds in principle-protected investment products with high safety and liquidity, according to an announcement from the Shenzhen-listed company on Monday.
On June 22, CATL announced that it priced its share offering through a private placement at RMB 410 per share. The company's total fundraising amount was RMB 45 billion, with actual proceeds of RMB 44.87 billion after deducting expenses.
CATL's latest announcement means that half of the funds it received through the private placement may be invested in wealth management products during its idle phase.
This is a move to improve the efficiency of the use of funds and increase revenue without affecting the use of the funds for project construction and normal operations, CATL said.
CATL plans to invest in wealth management products including principle-protected wealth management products, structured deposits, time deposits or large certificates of deposit with a holding period of up to 12 months, according to its announcement.
CATL initially announced plans to raise RMB 58.2 billion through the private placement to no more than 35 specific targets in August last year, but was subsequently challenged for over-financing.
In November last year, CATL lowered the planned fundraising amount by RMB 13.1 billion to RMB 45 billion.
The funds will be used for lithium battery capacity construction, technology development and other projects. Among them, the capacity-building project involves four production bases in China.
It is worth noting that this is not the first time CATL has announced plans for cash management of idle funds.
At the end of July last year, CATL said its board of directors agreed that the company would use up to RMB 5.5 billion of idle funds for cash management and investment in wealth management products.
At press time, CATL shares were down 2.15 percent to RMB 537.2, with Chinese stocks overall weak in early trading on Tuesday.