China battery maker Eve and its parent to invest in Huayou Cobalt1 min read . Updated: 26 Jan 2021, 04:04 PM IST
Eve's move is the latest strategic investment by a battery or automobile manufacturer looking to forge tighter links with raw material suppliers.
Chinese battery maker Eve Energy Co said on Tuesday the company and its controlling shareholder would invest 1.8 billion yuan ($278 million) in cobalt producer Zhejiang Huayou Cobalt via a private share placement.
Cobalt is a key ingredient in lithium-ion batteries for electric vehicles and Eve's move is the latest strategic investment by a battery or automobile manufacturer looking to forge tighter links with raw material suppliers.
Trending CarsSee All
Guangdong-based Eve will invest 300 million yuan via the placement, while its controlling shareholder, Tibet Yiwei Holding, will subscribe for 1.5 billion yuan of shares, the company said in a filing to the Shenzhen Stock Exchange.
Huayou, one of the world's biggest cobalt producers, said last month it had received regulatory approval for a private share placement seeking to raise around 6 billion yuan.
The share purchases could give Eve and its parent a combined stake of around 2% in Huayou post issuance, Daiwa Capital Markets analysts said. The placement is mostly intended to fund a project to make nickel - another battery metal - in Indonesia rather than cobalt, they said.
Huayou's shares closed down 5.6% on Tuesday but are up 23.6% so far in 2021, mirroring a 25% surge in cobalt prices on Chinese stockpiling and fears over disruption to supply from the Democratic Republic of Congo, the world's main source of cobalt, where Huayou has mining and smelting operations.
Huayou said last week it sees its annual net profit growing at least ninefold in 2020 due to rapid growth in demand for battery materials.
This story has been published from a wire agency feed without modifications to the text.