Tianqi Lithium Scraps Share Sale After Exchange Questions Plan

Lithium ore moves along a conveyor at a Talison Lithium Ltd. facility, a joint venture between Tianqi Lithium Corp. and Albemarle Corp., in Greenbushes, Australia, on Thursday, Aug. 3, 2017. Rising Chinese demand for lithium-ion batteries needed for electric vehicles and energy storage is driving significant price gains and an asset boom in Australia, already the world's largest lithium producer. Photographer: Carla Gottgens/Bloomberg

(Bloomberg) -- Tianqi Lithium Corp. announced the termination of a private share sale plan after receiving exchange query questioning the motives of the deal.

The Chinese company said in a statement to Shenzhen stock exchange on Sunday that it ended the plan to avoid short-swing trading and protect the interests of smaller shareholders.

Cancellation of the sale won’t impact the company’s business operation and development, the lithium producer said, but favors equity financing in future as it has a relatively high debt-to-asset ratio.

The company announced on Friday night that it planned to raise no more than 15.9 billion yuan ($2.45 billion) by issuing shares to its controlling shareholder Chengdu Tianqi Industry Group Co.

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