- The placing price is HK$335.2 per share, a 7.8 percent discount to BYD's closing price of HK$363.6 on March 3 in Hong Kong.
- BYD will raise HK$43.5 billion ($5.6 billion) through the issue of new shares for R&D investment, overseas business development.
BYD (HKG: 1211, OTCMKTS: BYDDY) is placing new shares in Hong Kong to raise funds to support its research and development, and further growth of its overseas business.
The new energy vehicle (NEV) maker entered into a share placement agreement after Hong Kong's stock market closed on March 3, and the agents will place the new shares with no fewer than six institutional investors, according to a Hong Kong stock exchange announcement today.
BYD will raise HK$43.5 billion ($5.6 billion) through the issuance of 129,800,000 new H shares, and the net proceeds from the placement are expected to be about HK$43.4 billion after deducting commissions and estimated expenses.
The company plans to use the financing for research and development, overseas business growth, replenishment of working capital and general corporate purposes.
The placing price of HK$335.2 per placing share, representing a discount of 7.8 percent to BYD's closing price of HK$363.6 in Hong Kong on March 3 and a discount of about 11.8 percent to the average closing price over the past 10 trading days.
The new shares represent about 11.82 percent of BYD's 1,098,000,000 H shares in issue and about 4.46 percent of the total number of shares in issue.
The move is aimed at providing the company's technological strength and speeding up its overseas expansion process, BYD said, adding that the addition of more institutional investors will enrich its shareholder base.
BYD's Hong Kong stock exchange announcement did not mention the investors involved in the placement, though its separate announcement on WeChat provided some details.
The transaction attracted the participation of investors including top long-term investors, sovereign funds, and Middle Eastern strategic investors, which underscores their bullishness on BYD's growth prospects, the company said.
The UAE-based Al-Futtaim family office participated in the deal as a strategic investor, and in the future, BYD and Al-Futtaim Group plan to establish a strategic partnership to deepen collaboration in areas including NEVs.
Al-Futtaim and BYD will use regional cooperation as a base to explore further growth opportunities and synergies, according to the NEV maker.
Founded in the 1930s and headquartered in the UAE, the Al-Futtaim Group works with more than 200 international brands in more than 20 countries across the Middle East and Southeast Asia.
BYD's $5.6 billion H-share placement is the largest equity refinancing program in the global auto industry in the past decade and the largest flash placement ever in the global auto industry, the company said.
It is also the second largest flash placing ever in the Hong Kong market and the largest flash placing ever in the industrial sector in the Hong Kong market, according to BYD.
Yesterday, Bloomberg cited the terms of a deal that said BYD would raise as much as HK$40.7 billion by issuing 118 million shares at prices ranging from HK$333 to HK$345 per share.
BYD's announcement today represents a larger share offering and a higher amount of money to be raised.
BYD's stock has seen significant gains so far this year and returned to the club of companies with a market capitalization of RMB 1 trillion early last month.
As of yesterday's close, BYD's market capitalization stood at RMB 1.05 trillion.
The company's Hong Kong-traded shares have accumulated about 40 percent gains so far this year.
($1=HK$7.7775)
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