Chinese automotive giant Geely Automobile Holdings has obtained regulatory approval for its hotly-anticipated secondary listing on Shanghai's Star Market tech innovation board. The approval comes amid a recent announcement by the automaker revealing its plan to release 10 new electric vehicle models by 2025.
According to an announcement made by the Shanghai Stock Exchange on Tuesday, Geely is aiming to raise up to 20 billion yuan or roughly $2.94 billion through its Star Market listing. The exchange stated that the company, which also owns Volvo Cars, is planning to use the proceeds of the secondary share sale to finance its research and development of its planned new electric products.
"The green light for Geely underscores the important role of the carmaking industry in China. Regulators hope that companies like Geely would use the funds to propel technological development in next-generation cars," analysts at Shanghai-based financial research firm Integrity had stated.
Geely, which was initially established as a refrigerator compressor manufacturer in the 1980s, is planning to sell around 1.73 billion shares on the NASDAQ-styled tech board. This represents about 15 percent of its enlarged capital.
At present, Geely currently holds about a 6.8 percent share in the country's car market. During the first half of the year, the company was able to deliver a total of 530,446 units. While it may have been 19 percent lower year-on-year, it was still a respectable performance given the disruptions caused by the pandemic.
The Chinese carmaker is one of the hundreds of other automotive manufacturers that have responded to the government's call to use new energy vehicles to accelerate the country's economic growth. Under the country's "Made in China 2025" initiative, the goal would be to have at least 25 percent of all of the country's vehicles be new energy models.
To support the initiative, China has launched the Shanghai Star Market last year through an order made by Chinese President Xi Jinping. The tech board was established to become a testbed for a new registration-based listing system that accelerates the fundraising process for the country's private sector.
