Posted on 15 Jul 2024
Chinese battery giant CATL is reportedly seeking investment from overseas sovereign wealth funds, private offices of the ultra-rich, and carmakers to raise $1.5 billion for an offshore fund to strengthen its global supply chain.
The Financial Times says the move is targeted primarily at the European market. “The purpose of the fund is to facilitate the global energy transition with support from like-minded partners from all over the world,” a CATL spokesperson is quoted as saying.
Citing an unnamed person briefed on the fund, the report said China’s overseas direct investment rules make it difficult for the battery maker to make a large volume of international investments. This is down to China’s strict system of capital controls, rather than CATL’s cash reserves.
German carmaker Mercedes-Benz is also said to have been approached.
Under the reported proposal, CATL and its global corporate investors would contribute about 15% of the fund, which would mainly target companies that can potentially be suppliers for CATL in Europe. These could include miners.
The offshore fund is planned to be managed by Hong Kong-based Lochpine Capital. The firm was incorporated in August 2023 using the original name CATL Capital.
In addition to likely bypassing strict and lengthy scrutiny from the Chinese government on investments outside of mainland China, the fund would potentially help dilute geopolitical tensions. The involvement of multinational firms, especially European, could potentially improve EV-related trade between China and Europe, and China and the US.
Beijing is strengthening its relationship with Hungary, where CATL and BYD are building manufacturing capacity.
Following a recent meeting with Hungarian Prime Minister Viktor Orban, China’s President Xi Jinping said: “We hope that Hungary, as the rotating presidency of the European Union, will play a positive role in promoting a healthy and stable development of China-EU relations.”
Kallanish Power Materials has contacted CATL and Mercedes-Benz for comment.
Source:Kallanish
