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Longi, a Chinese Solar Firm, has Chosen CICC for a $4 Billion GDR Sale

Longi Green Energy Technology Co., a Chinese solar power equipment company, has selected China International Capital Corp. for a sale of global depository receipts in Switzerland, according to people familiar with the matter.

November 22, 2022
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Longi Green Energy Technology Co., a Chinese solar power equipment company, has selected China International Capital Corp. for a sale of global depository receipts in Switzerland, according to people familiar with the matter.

A Shanghai-listed company could sell GDRs in Zurich as soon as in the first half of next year, according to people familiar with the matter. Longi, the world’s biggest solar company by market capitalization, said in an exchange filing last month that it could sell the GDR equivalent of as much as 8% of its outstanding shares, which would be nearly $4 billion worth, according to Bloomberg calculations.

The company could decide to sell less than that depending on market conditions, the people said. This would give them the flexibility to respond to changes in the market and ensure that they are able to sell their products.

Discussions are ongoing and more banks could be added at a later stage, according to sources. Representatives for CICC and Longi declined to comment.

At $4 billion, Longi's Swiss GDR offering would be the biggest by a Chinese company since the country's regulators started encouraging its firms to consider selling shares there. This is due to policy uncertainties and geopolitical tensions making listings in the US more difficult.

China’s securities regulator said in February that the Shanghai-London Stock Connect would be extended to include firms listed in Switzerland, Germany and Shenzhen. This would allow companies that are listed on one exchange to offer depositary receipts on the other.

In July, four Chinese firms including battery makers GEM Co. and Gotion High-Tech Co. raised a total of $1.5 billion in Swiss listings. Although the debuts opened the door for more GDR sales, they were met with muted trading.

Longi, a Chinese company, was founded in 2000. It has nearly 50,000 employees and holds almost 1,400 patents, according to its website. Longi is one of several Chinese manufacturers whose products have been detained by US Customs beginning last year, after the US banned some solar material from Xinjiang due to alleged human rights abuses. China’s foreign ministry has repeatedly denied claims of forced labor, labeling them as an attempt to undercut its businesses.

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