Chinese carmaker Geely scraps US$3 billion secondary listing on Shanghai’s Nasdaq-like Star Market
- Decision to not proceed with the listing made in a board of directors meeting on Friday, company says
- Scraping of Shanghai listing will add pressure to Geely’s share price: analyst
The Hangzhou-based carmaker will not proceed with its plan to raise as much as 20 billion yuan (US$3.1 billion) through the sale of yuan-denominated A shares, it said in a filing with the exchange in Hong Kong, where it is listed.
“The company decided to withdraw the application for the proposed RMB share issue on the Sci-Tech Board [Star Market],” the company said in the filing. The decision to not proceed with the listing was made in a board of directors meeting on Friday, it added.
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“The scraping of the Shanghai listing will add pressure to the future share price of Geely, as the decision to scrap the fundraising plan may mean the company has delayed investment in some projects,” said Gordon Tsui, chairman of the Hong Kong Securities Association.
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Geely said the decision was made after reviewing the company’s business and after discussions with the professional parties involved in the proposed yuan share issue. “Withdrawing the application for the proposed RMB share issue on the Sci-Tech Board will not give rise to any material adverse impact on the financial position or operation of the group,” it said.
Moreover, the company had not abandoned the listing forever, it said, adding that “when the relevant conditions are met”, it would once again pursue the share issuance.
Geely was founded by Zhejiang entrepreneur Li Shufu in the 1980s and began as a maker of refrigerator compressors. In February, Geely Auto abandoned a plan to merge with sister company Volvo Cars, Reuters reported.