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Chinese EV maker Leapmotor seeks to raise $1 billion in Hong Kong IPO

September 20, 2022 11:54 pm

Chinese electric car maker Zhejiang Leapmotor Technology plans to raise $1.03 billion in an initial public offering (IPO) in Hong Kong, which will be the city's largest in 2022, regulatory filings show.

The company is selling 130.82 million shares in the deal, in a price range of HK$48 to HK$62 each. The majority of the cash raised will be used for research and development and expanding production capacity, according to its filings.

Based on the price range flagged to investors, the company will have a market capitalization of $6.99 billion to $9.03 billion.

Leapmotor had planned to raise $1.5 billion but reduced the size of the deal after a lukewarm response from investors, Reuters previously reported, citing sources. The IPO was paused a fortnight ago following the company's initial briefings with potential investors while financial markets were volatile, Reuters said.

The final pricing of the shares will take place on Friday, and the shares will begin trading on September 29.

A total of 5 cornerstone investors, lead by Zhejiang and Jinhua industrial funds, have committed to purchasing up to $308.33 million in shares, as disclosed in the company's filings.

So far, Leapmotor has closed six funding rounds totaling over 11.5 billion yuan. The company was valued at nearly 22 billion yuan before its listing. Investors include Hangzhou State-owned Assets Supervision and Administration Commission, Guosen Securities, CICC Capital, Sequoia Capital, Shanghai Electric, etc.

Leapmotor manufactures four different electric car models in the price range of 79,500 to 300,000 yuan ($11,470 to $43,270), mostly aiming at the middle and lower end of China's massive mass market.

According to the China Passenger Car Association, in the first seven months of 2018, the company's sales ranked 12th among all EV manufacturers in China, with a market share of 2.3%.