Chinese Tesla rival Xpeng to raise up to $2 billion from Hong Kong listing

A Xpeng P7 electric car is on display during the 18th Guangzhou International Automobile Exhibition at China Import and Export Fair Complex on November 20, 2020 in Guangzhou, Guangdong Province of China.

VCG | Visual China Group | Getty Images

GUANGZHOU, China — Chinese electric carmaker Xpeng will raise up to nearly $2 billion in a Hong Kong listing.

The Guangzhou-based company said on Thursday it will issue 85 million Class A ordinary shares at a price of no more than 180 Hong Kong dollars ($23.19) each. A final offer price will be set on or around Jun. 30.

At the maximum offer price, Xpeng would raise 15.3 billion Hong Kong dollars ($1.97 billion) before related costs such as underwriting fees.

CNBC reported earlier this week that Xpeng is looking to raise between $1 billion and $2 billion.

Xpeng is already listed in New York. Its share offering in Hong Kong is unusual because it's not a secondary listing, as companies including Alibaba and JD.com have done. A secondary listing is when a company already has a main listing location such as the United States, and it then sells shares on another exchange.

Instead, Xpeng is doing what's called a dual-primary listing. That means it will be subject to the rules and oversight of both U.S. and Hong Kong regulators, which isn't the case with a secondary listing.

Depending on demand, Xpeng and its underwriting investment banks could issue more shares, which would presumably raise the amount of money the company gets from the listing.

Xpeng said it will use the proceeds from the Hong Kong listing to expand its products and develop more advanced technologies, as well as marketing and expanded manufacturing.

Read more about electric vehicles from CNBC Pro

U.S.-listed Chinese companies have looked to list in Hong Kong as a way to hedge against tensions between China and the United States.

Earlier this year, U.S. Securities and Exchange Commission adopted rules that impose stricter auditing requirements on foreign firms listed in America. Those requirements carry the threat of delisting for companies that run afoul of the rules.

Xpeng faces rising competition in China from other start-ups like Nio and Li Auto, as well as Tesla and traditional automakers that are entering the electric vehicle market.

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