Ganfeng Lithium Industry plans to raise about HK $4.869 billion to increase the construction of overseas lithium resources projects.

On the morning of June 11, Ganfeng Lithium (002460) issued an H-share announcement. On June 10 (after the trading session), the company entered into a placing agreement with the placing agent for the placing of 48.0444 million new H-shares at a price of HK $101.35 per H-share.

According to the announcement, the placing shares accounted for about 20% and 3.46% of all the existing issued H shares and all the existing issued share capital of Ganfeng Lithium Industry on June 11, respectively, and accounted for about 16.67% and 3.34% of the company's total issued H shares and total issued share capital expanded by the allotment and issuance of placing shares, respectively. The total face value of the placing shares will be RMB 48.0444 million. The placing Agent will place the placing shares to not less than six Placees, including professional investors, institutional investors or other investors, during the placing period in accordance with the terms and conditions set out in the placing Agreement.

It is learnt that assuming that all the placing shares are fully placed, the total proceeds from the placing are expected to be about HK $4.869 billion and the total net proceeds from the placing (after deducting all applicable costs and fees, including commissions and solicitors' fees) are estimated to be about HK $4.855 billion. Ganfeng Lithium intends to use the net proceeds from the placement for capacity expansion, potential investment, replenishment of working capital and general corporate uses. The construction of capacity expansion is mainly related to the company's overseas lithium resources projects. Potential investment in lithium resources may include ore, brine, lithium clay and so on. The company plans to use the net proceeds within the next one to two years.

It is worth noting that in September last year, Ganfeng Lithium successfully placed a total of 40.037 million H shares, resulting in a total net income of about HK $1.449 billion, which has been mainly used for the construction of the company's overseas projects and for general corporate purposes. As of June 11 this year, Ganfeng Lithium said that the net proceeds from the previous H-share offering had been fully utilized.

The battery network noted that since May, Ganfeng Lithium Industry has accelerated the layout of overseas lithium power upstream resources, and the capital operation is frequent.

On the evening of May 6th, Ganfeng Lithium announced that it had agreed to a wholly-owned subsidiary of Shanghai Ganfeng to make an offer for all issued shares of Bacanora (except Shanghai Ganfeng already held shares) with its own funds, with a transaction value of no more than 190 million pounds (equivalent to about 1.711 billion yuan at the latest exchange rate). Upon completion of the deal, Shanghai Ganfeng will hold a 100 per cent stake in Bacanora.

Bacanora is a company that was founded and listed on the AIM sector of the London Stock Exchange in 2018. Its main business is group holding and lithium clay resource project management. Its main asset is the Lithium Clay Sonora project in Mexico; as of the date of disclosure of this announcement, the issued share capital of Bacanora is 330811568 shares, with Shanghai Ganfeng as the largest shareholder and holding a stake in Bacanora17.41%. Shanghai Ganfeng and Bacanora each own 50 per cent of the Sonora project.

On the evening of May 26th, Ganfeng Lithium Industry issued another announcement. Recently, the company received notice from Shanghai Ganfeng that Shanghai Ganfeng has completed the consideration and delivery of equity transactions paid by Bacanora. Before the completion of the transaction, Shanghai Ganfeng held 17.41% of Bacanora (as other shareholders subscribed for the newly issued shares of Bacanora and completed the equity delivery ahead of Shanghai Ganfeng, resulting in the dilution of Shanghai Ganfeng's stake in Bacanora from 25.74% to 17.41%). After the completion of this transaction, Shanghai Ganfeng holds 28.88% of Bacanora.

On the evening of May 28th, Ganfeng Lithium announced that it had agreed to invest US $15 million of its wholly-owned subsidiary Ganfeng International in Singapore's SRN-listed company-level negotiable bonds at an interest rate of 7% for a term of 3 years.

It is reported that the negotiable bond is backed by a 100 per cent stake in FE, a wholly owned subsidiary of SRN, which holds laterite nickel assets. Six months after the investment takes effect, Ganfeng Lithium has the right to convert its 100 per cent deliverable equity into a 25 per cent stake in FE. At the same time of the conversion, the company has the right to increase its stake in FE to 50 per cent at an additional consideration of $15 million. If exercised, Ganfeng will acquire a 50 per cent stake in FE for a cumulative consideration of $30 million.

According to the announcement, SRN is a listed company in Singapore, mainly engaged in the exploration, mining, production and sale of nickel ore. Its wholly-owned subsidiary FE holds 100% of the assets of its wholly-owned subsidiary PT Teknik Alum Services (in Indonesia, hereinafter referred to as "TAS") laterite nickel project.