Electric car maker BYD raises HK$30b in upsized sale

Hong Kong

BYD Co, a Chinese electric-vehicle manufacturer backed by Warren Buffett, raised HK$29.9 billion (S$5.1 billion) from an upsized sale of its Hong Kong-listed shares, capitalising on rising demand for new-energy vehicles and a blistering stock rally.

The company agreed to sell 133 million shares at HK$225 each, representing a discount of 7.8 per cent to Wednesday's closing price of HK$244, according to a statement. The placed shares represent 14.54 per cent of its enlarged H-share base, the statement showed.

BYD had previously planned to offer 121.1 million shares at HK$222 to HK$228 each, according to terms of the deal obtained by Bloomberg News. Shares in BYD fell as much as 3.3 per cent in early Hong Kong trading on Thursday. The offering comes after BYD's shares have surged more than 400 per cent in the last 12 months in Hong Kong, part of a broader rally in EV maker stocks buoyed by strong investor expectations for the industry's growth. At US$3.9 billion, BYD's primary share placement is the biggest in Hong Kong since Haitong Securities Co's US$4.2 billion share sale in 2014.

BYD is the latest in a growing line of Chinese EV makers to tap capital markets for funding. Last year, they raised billions of dollars in share sales: Chinese rival Xpeng Inc sold US$2.5 billion worth of new stock, while Nio Inc fetched US$3.1 billion in December. Xpeng also signed an agreement with banks for a US$2 billion line of credit earlier this year.

Electric-car demand is increasing in China, benefiting industry leader Tesla Inc as well as its local contenders such as Nio and Xpeng that focus on their domestic market. New energy vehicle retail sales rose 9.8 per cent in 2020 to 1.11 million units, with a 58 per cent year-on-year jump in December to 206,000 units.

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Shenzhen-based BYD plans to use the cash to replenish its working capital, repay interest-bearing debt, and invest in research and development, according to the filing. BLOOMBERG