By Scott Murdoch
HONG KONG (Reuters) – Chinese electric vehicle maker Xpeng Inc will raise $ 1.8 billion by pricing its shares at HK $ 165 ($ 21.25) each as part of its dual primary listing at Hong Kong, said two people with direct knowledge of the matter.
The people refused to be identified because the information was not yet public. Xpeng declined to comment on the pricing advice given to investors.
The company sold 85 million shares in the deal, which is equivalent to 5% of its shares, according to its prospectus. There is an over-allotment option to sell an additional 12.75 million shares, which would raise an additional $ 270 million.
Xpeng’s American Depository Receipts (ADRs) in New York City closed at $ 44.32 on Tuesday, down nearly 1%. One ADR is the equivalent of two common shares in Hong Kong, depending on the terms of the transaction.
The stock has doubled since its debut in August 2020, but is well below its November high of $ 64.28.
Xpeng chose a dual primary listing over a secondary listing because it has been listed in New York for less than two years. Under Hong Kong rules, a secondary listing requires at least two fiscal years of good regulatory compliance on another eligible exchange.
The dual primary listing allows qualified Chinese investors to invest in the company through the Stock Connect regime linking the mainland China and Hong Kong markets, according to exchange rules.
Led by General Manager He Xiaopeng, Xpeng sells primarily to China, the world’s largest auto market, where it competes with Tesla Inc and Nio Inc.
A cap of HK $ 180 per share ($ 23.19) was imposed on retail shareholders as part of the listing.
($ 1 = 7.7625 Hong Kong dollars)
(Reporting by Scott Murdoch in Hong Kong; Editing by Christopher Cushing and Edwina Gibbs)