GUANGZHOU -- BYD plans to raise up to 15 billion yuan ($2.4 billion) through a private placement of new shares and intends to use some of the money to develop environmentally friendly vehicles, the Chinese company said Thursday.
The automaker will issue yuan-denominated A shares in mainland China. A formal decision on the plan will be made at an extraordinary shareholders meeting July 21.
BYD aims to spend 6 billion yuan on expanded production of lithium-ion batteries for green vehicles and 5 billion yuan on electric vehicle and plug-in hybrid development. The remaining 4 billion yuan will be used as working capital and put toward bank loan repayment.
BYD reported net profit of 120.94 million yuan for the January-March quarter. Profitability has stagnated amid slowing growth in China's auto market. With sales of standard gasoline-fueled cars still poor, the automaker's biggest challenge will be to revive sales of eco-friendly vehicles.