Geely gets nod to raise capital on Shanghai’s Nasdaq-like Star Market as carmaker remakes itself into tech company

Geely Automobile Holdings, China’s largest private carmaker and owner of Volvo Cars, has obtained regulatory approval for a secondary listing on Shanghai’s Nasdaq-like exchange for start-ups, as it redefines itself as a technology company with its line-up of 10 electric cars by 2025.

The Hangzhou-based carmaker aims to raise as much as 20 billion yuan (US$2.94 billion) on the Star Market to finance its development of new technologies and models, according to an announcement by the Shanghai Stock Exchange.

“The green light for Geely underscores the important role of the carmaking industry in China,” said Ding Haifeng, a consultant with Shanghai-based financial advisory firm Integrity. “Regulators hope that companies like Geely would use the funds to propel technological development in next-generation cars.”

The approval for Geely on the Science and Technology Innovation Board, as the Star Market is formally known, is significant for another reason: the exchange is the test bed for a new registration-based listing regime that cuts waiting time, providing a more timely fundraising avenue for China’s private sector as they occupy the driver’s seat of entrepreneurship and innovation.

Geely, which began as a maker of refrigerator compressors during the late 1980s founded by Zhejiang entrepreneur Li Shufu, said it plans to sell 1.73 billion shares on the Start Market, or 15 per cent of its enlarged capital, according to a September 1 prospectus. The carmaker was requested to clarify its growth potential and strategies of its new-energy vehicle segment during its Star Market listing hearing, the exchange said.