HONG KONG, CHINA: According to two persons with firsthand knowledge of the subject, Chinese electric car producer Xpeng Inc will raise US$1.8 billion by selling its shares at HKUS$165 (US$21.25) each as part of its Hong Kong dual main listing. Because the information was not yet public, the people declined to be identified. Investor pricing guidance was offered by Xpeng, but he declined to comment.
According to the company’s prospectus, the acquisition resulted in the sale of 85 million shares, or 5% of its total stock. An over-allotment option exists to sell an additional 12.75 million shares, raising an additional US$270 million. The New York American Depository Receipts (ADR) of Xpeng closed at US$44.32 on Tuesday, down about 1%. According to a term sheet for the offer, one ADR is equal to two ordinary shares in Hong Kong. The stock has more than doubled since its initial public offering in August 2020, although it is still considerably below its November top of US$64.28. Because it has only been listed in New York for less than two years, Xpeng chose a dual primary listing over a secondary listing. A secondary listing in Hong Kong requires at least two financial years of satisfactory regulatory compliance on another qualifying market, according to Hong Kong regulations.
According to the exchange’s guidelines, the dual primary listing permits qualified Chinese investors to invest in the company through the Stock Connect system, which connects mainland Chinese and Hong Kong markets.
Xpeng, led by CEO He Xiaopeng, sells primarily in China, the world’s largest automobile market, where it competes with Tesla Inc. and Nio Inc.
As part of the offering, the deal was capped at HK$180 per share (US$23.19) for individual investors.
(One US dollar equals 7.7625 Hong Kong dollars)
(In Hong Kong, Scott Murdoch reported; Christopher Cushing and Edwina Gibbs edited)
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