Chinese battery giant CATL’s $5 billion listing in Switzerland has been delayed amid regulatory concerns in Beijing

A worker stands in front of a Contemporary Amperex Technology Ltd (CATL) factory in Ningde
A worker stands in front of a factory of Contemporary Amperex Technology Ltd (CATL) in Ningde, east China’s Fujian province, December 16, 2016. Picture taken December 16, 2016.

Chinese battery giant CATL’s plan to raise at least $5 billion in Swiss Global Depository Receipts (GDR) has been delayed as regulators in Beijing raise concerns about the size of the supply, three people with direct knowledge of the matter said.

The world’s largest battery maker, formerly known as Contemporary Amperex Technology Co (CATL), was expecting to get the green light to list in Zurich from China’s securities regulator by the end of January, one of the sources said. But the process is taking longer than expected, all three sources told Reuters.

The delay has come to light a week after Chinese President Xi Jinping told CATL he had mixed feelings about its status as the biggest player in a burgeoning business tracking the rise of electric vehicles around the world. Xi’s comments came in a rare public intervention about one of China’s most competitive sectors in the world.

In response to a presentation by CATL Chairman Robin Zeng on the sidelines of China’s annual parliamentary session last week, Xi was quoted by official media as saying he was “both happy and concerned” – glad of the industry-leading position of CATL but concerned about the risks as the company quickly expands overseas and seeks to undercut domestic rivals.

CATL, which is worth about $139 billion by market value and is now expanding in Germany and the United States, already controls 37% of the global battery market, according to its 2022 annual report. It supplies auto giants like Tesla Inc, Volkswagen and BMW.

The company has told the China Securities Regulatory Commission (CSRC), whose approval is required for the listing, that it plans to use the proceeds to fund its European expansion plans, specifically the development of a plant in Hungary, a source said possibly also fund expansion in the United States.

In early February, sources said CATL intended to resume listing as early as May. According to the sources, who said they could not be named as they were discussing private information, there is no new timeline for the deal to go ahead.

The CSRC did not immediately comment when contacted by Reuters.

CATL did not respond to a request for comment.


The sources said the Chinese regulator has concerns about the massive scale of CATL’s DDR offering.

The CSRC is also reviewing CATL’s proposed use of the proceeds, sources said, adding the regulator has questioned the battery maker’s need to raise so much money after it pledged 45 billion yuan ($6.56 billion) in June ) in a jumbo domestic share placement.

The company said at the time that the proceeds from the placement will be used to fund lithium-ion battery production and upgrading in four Chinese cities and to sponsor research and development.

The private placement was the largest equity market transaction in China last year and the second-largest follow-up transaction in 2022 globally, according to Dealogic data.

At $5 billion, the DDR deal would be by far the largest such listing by a Chinese company in Switzerland, according to Refinitiv data.

Chinese companies began listing in Switzerland last year after launching a cross-listing platform that allows companies to raise capital by issuing and listing GDRs on the Swiss stock exchange SIX. Swiss companies can issue Chinese Depository Receipts on the Chinese stock exchanges.

According to data from Refinitiv, 11 Chinese companies have raised $3.66 billion in Swiss listings since launching last year.

GDRs are a fundraising option used by companies to allow investors outside of the company’s home base to buy and trade the shares on the local stock exchanges of the shareholders.

Offshore investors are attracted to the GDRs of Chinese issuers as they can generally buy the shares at a 10% discount and freely convert into Chinese equivalents after 120 trading days on European exchanges. With much better liquidity in the domestic market, investors can exit more easily.

But when investors transfer capital from onshore to offshore, it consumes some of China’s foreign exchange reserves, while issuers typically keep the proceeds collected for use overseas. Such practices have also made Chinese regulators less keen on waving through mega-DDR deals, two of the sources familiar with the matter said.

($1 = 6.8590 Chinese renminbi yuan)

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