Tianqi Lithium halts 15.93B yuan private share sale after exchange query

Tianqi Lithium Corp. halted a private share sale plan worth 15.93 billion Chinese yuan after receiving queries from the Shenzhen Stock Exchange.

The Chinese lithium producer said in a Jan. 17 filing that it had terminated the private share sale plan to avoid short-swing trading and to protect the interests of smaller shareholders, just two days after the plan was announced.

Tianqi said in a late Jan. 15 filing that it planned to raise as much as 15.93 billion yuan by issuing stocks to its controlling shareholder Chengdu Tianqi Industry Group Co. Ltd. at 35.94 yuan apiece to repay its bank loans. The closing price of Tianqi's share on Jan. 15 was at 80.71 yuan.

Chengdu Tianqi, which owns 30.05% of Tianqi, has a plan of reducing its stake in Tianqi by 3.46% starting Jan. 29 over a six-month period, according to a Jan. 7 statement. In 2020 Chengdu Tianqi reduced its stake in Tianqi Lithium by 6%, from 36.04%.

On Jan. 16, the Shenzhen bourse queried the deal and required Tianqi to clarify if the private placement would hurt the interests of smaller shareholders. The stock exchange also noted that Tianqi's share price increased by 201.8% over the past trading days, asking Tianqi to investigate if any inside information was leaked.

In December 2020, Australian nickel and gold miner IGO Ltd. agreed to acquire a 49% stake in Tianqi's Australian unit that controls the Greenbushes mine for US$1.4 billion, after the Chinese company secured a one-month extension for a syndicated loan to partially fund its US$4.07 billion acquisition of a 23.77% stake in Sociedad Quimica y Minera de Chile SA in 2018.

As of Jan. 15, US$1 was equivalent to 6.48 Chinese yuan.