BYD, CATL invest in lithium battery material supplier Shanshan’s subsidiary

Shanghai (Gasgoo)- Ningbo Shanshan Co., Ltd. (“Shanshan”), a Chinese lithium battery materials supplier, announced on Tuesday it intends to make a capital increase to its sub-subsidiary, Shanghai Shanshan Lithium Battery Materials Technology Co., Ltd. (“Shanghai Shanshan”), through its wholly-owned subsidiary and four strategic investors.

According to Shanshan’s announcement, the four investors are BYD Company Limited (“BYD”), Ningbo Meishan Bonded Port Area Wending Investment Co., Ltd. (a wholly-owned subsidiary of CATL), Amperex Technology Limited, and CNPC Kunlun Capital Company Limited.

On the same day, all parties signed an agreement for the strategic investment in Shanghai ShanShan.

Shanghai Shanshan's manufacturing base; photo credit: Shanshan

Shanshan stated the wholly-subsidiary, Ningbo Shanshan New Energy Technology Development Co., Ltd. (“Ningbo Shanshan New Energy”) and the four investors plan to plow a total of 3.05 billion yuan ($478.72 million) in Shanghai Shanshan, and subscribe for 305 million yuan ($47.872 million) of the registered capital newly increased to Shanghai Shanshan.

In this transaction, BYD and CATL's subsidiary plan to invest 150 million yuan ($23.543 million) and 300 million yuan ($47.087 million) respectively. They will subscribe for 15 million yuan ($2.354 million) and 30 million yuan ($4.709 million) of Shanghai Shanshan's newly added registered capital.

Upon completion of the capital increase, the registered capital of Shanghai Shanshan will be increased to 1.182 billion yuan ($185.522 million) from 877 million yuan ($137.651 million). Shanshan will still be the controlling shareholder, but its shareholding ratio in Shanghai Shanshan will drop to 87.08% from 89.99%.

Shanshan said the capital increase will help Shanghai Shanshan improve its asset and liability structure, lower financial costs, enhance capital strength, so as to provide capital supports for the business expansion of anode materials business.

Founded in December 2014, Shanghai Shanshan primarily engages in the R&D, production, and sales of the anode materials and carbon-graphite materials for lithium batteries.