Geely scraps share placement in Shanghai; seeks capital for smart car brand

Geely Automobile Holdings withdrew an application to issue domestic-currency-denominated shares on the high-tech board of the Shanghai Stock Exchange.
 
The largest private Chinese carmaker is also hatching plans to raise capital for a newly created smart car brand, Zeekr.
 
The decision to withdraw the application to offer shares on the Shanghai exchange was made “in view of the company’s business decisions and strategic adjustments,” Geely, a Hong Kong-listed company, said last week.
 
But the move doesn’t mean the company has abandoned plans to raise capital from China’s capital markets, Geely noted.
 
“When the relevant conditions are met, the company will actively promote the listing work of renminbi share issuance,” it added, referring to the Chinese currency.
 
In September 2020, Geely applied to the Shanghai Stock Exchange to issue renminbi-denominated shares on the exchange’s Sci-Tech Board to raise 20 billion yuan ($3.1 billion) for product and technology development.
 
The Sci-Tech Board, also known as the STAR market, was created in 2019 by the Shanghai Stock Exchange to support companies seeking to raise capital to develop advanced technologies or to integrate information technology into business activities.
 
Geely said it has started exploring external funding sources to support the Zeekr premium smart car brand unveiled in March.
 
Zeekr’s first product -- the 001 electric coupe-like sedan -- was launched at the Shanghai auto show in April.
 
To build and market Zeekr vehicles, Geely has established a subsidiary, Zeekr Intelligent Technology Holding.
 
The board of the new subsidiary “has passed a resolution to explore different external financing options for the sustainable development of Zeekr Intelligent Technology,” Geely said on June 25.
 
Geely, based in the east China city of Hangzhou, produces and distributes vehicles under the mass-market Geely brand and a premium marque, Lynk & CO.
 
In May, Geely’s sales dropped for the second straight month, slipping 12 percent to 96,167. The company’s deliveries through May jumped 26 percent from a year earlier to 530,074.
 
Geely’s parent, Zhejiang Geely Holding Group, also owns Volvo Car Corp.