(Bloomberg) — Chinese car and battery maker BYD Co. is seeking to raise up to $1.8 billion in a share placement, according to terms obtained by Bloomberg.
Most Read from Bloomberg
The Shenzhen-based company is looking to sell 50 million H-shares at HK$273.5 to HK$279.5 each, which represents an up to 7.8% discount to its Friday closing price.
The Warren Buffett-backed company is the top gainer in the Hang Seng Index this month, surging 22%. It reported a 28% drop in net income for the September quarter from a year earlier, as the global chip shortage undermined its ability to meet surging demand for clean cars.
READ: China’s EV Stocks Are on a Tear as BYD Leads on Robust Sales
The company sold 445,963 cars in the nine months through September, with about half of them hybrid or pure-electric vehicles. Faced with rising costs, BYD has increased the prices of its battery products by at least 20% from Monday, Caixin reported this week, citing a company letter to clients.
A rapid expansion of capacity could see BYD’s annual battery output climbing to 155 gigawatt-hours by 2023 from 60 GWh in 2020, beating most domestic rivals, Bloomberg Intelligence analysts Steve Man and Joanna Chen wrote in a Sept. 28 note.
The placement’s proceeds will be used to supplement working capital, repay debt, as well as invest in research and development, according to the terms.
Its shares listed in Frankfurt tumbled as much as 4.3% after the placement news.
(Adds price move for Frankfurt-listed shares)
Most Read from Bloomberg Businessweek
©2021 Bloomberg L.P.