China's Ganfeng Lithium to sell $630 mln of shares to fund expansion

June 11 (Reuters) - Ganfeng Lithium , one of the world’s top lithium producers, said on Friday it would sell around HK$4.9 billion ($630 million) in new shares to boost capacity and fund potential investments.

The Chinese company in March announced an ambitious plan to increase its lithium production capacity roughly fivefold to 600,000 tonnes of lithium carbonate equivalent a year, as demand for the commodity used in electric-vehicle batteries surges again after a three-year downturn.

Ganfeng, which is listed in Shenzhen and Hong Kong, said in a filing just over 48 million new Hong Kong shares (H shares), equivalent to around 20% of its existing issued H shares, would be placed at a price of HK$101.35 per share.

That represents a discount of 5% to its closing price in Hong Kong on Thursday.

The company intends to use 80% of the HK$4.85 billion net proceeds for capacity expansion, mostly at its lithium projects overseas, and potential investment in lithium resources. The other 20% has been earmarked for replenishment of working capital and general corporate purposes.

“The company plans to use the net proceeds in the following one to two years,” Ganfeng said, adding that the shares would be placed with no less than six investors.

Banks CLSA, Merrill Lynch, UBS and Citigroup Global Markets were named as placing agents. ($1 = 7.7597 Hong Kong dollars) (Reporting by Tom Daly; editing by Richard Pullin)