(Yicai Global) Nov. 16 -- Contemporary Amperex Technology has decided to scale down the size of a planned private placement of shares, one of the biggest ever by a company listed in the Chinese mainland, by CNY13 billion (USD2 billion) due to regulatory pressure.

The world’s largest battery maker now intends to issue no more than CNY45 billion (USD7 billion) of new shares rather than CNY58.2 billion, Ningde, Fujian province-based CATL said. It has also canceled a CNY31 billion project to expand lithium battery production and a plan to supplement working capital with CNY93 billion.

CATL announced on Aug. 12 that it would place 232.9 million shares with institutional investors to fund six projects that would more than double its capacity to make electric car batteries. But investors questioned the size of the private placement as the firm has sufficient funds, prompting CATL to defend the plan last month. The Shenzhen Stock Exchange, where CATL is listed, also sought further details.

Bearing in mind the size and pay-back period of the private placement plan, the firm’s financial status, and external investment factors, the scaled-down funding will be used more efficiently and on capacity building, research and development, CATL said yesterday.

A huge amount of money is needed to develop future business as the new energy industry is growing rapidly worldwide, CATL said in a supplementary response to the inquiry released yesterday.

To meet demand the Tesla supplier’s annual lithium battery capacity is expected to reach 520 gigawatt-hours by 2025, so it is short of 280 GWh at the moment. The private placement will bring in funds to list capacity by 135 GWh, in line with CATL’s business development needs, it said.

CATL’s peers are hiking capacity through financing as the industry is developing fast. Its major rival South Korea-based LG Energy Solution is likely to raise about USD10 billion through an initial public offering this year, CATL said.

CATL reported net profit of CNY3.3 billion (USD515.7 million) in the third quarter on revenue of CNY29.3 billion (USD4.6 billion), both more than doubling from the same period last year.

Shares of CATL [SHE:300750] closed 0.8 percent lower today at CNY614.97 (USD96.43), giving it a market value of over CNY 1.4 trillion (USD224.2 billion). Its stock price has climbed 75 percent so far this year.

Editors: Dou Shicong, Futura Costaglione