Shanghai (ZXZC)- Chinese commercial vehicle maker Beiqi Foton Motor Co., Ltd. (Foton Motor) on April 1 issued a pre-plan for a non-public issuance of A shares, which is aimed at its controlling shareholder, BAIC Group, at a price of 2.1 yuan ($0.33) per share.

Photo credit: Foton Motor

Under the scheme, Foton Motor intends to issue around 1.429 billion shares, which account for 21.73% of the company's outstanding stock, to raise about 3 billion yuan ($471 million). After the deduction of issuance cost, the money raised will be entirely used to supplement working capital or repay loans.

BAIC Group currently holds 27.89% stake in Foton Motor. Upon completion of the stock issuance, the state-owned auto giant will grab more controlling rights over Foton Motor with its equity contribution increased to over 30%.

Foton Motor said the non-public offering is made to further expand the company’s direct financing channels and enlarge the proportion of equity financing, so as to help it collect more capital for business development, maintain a reasonable capital structure, and enhance the anti-risk capability.

Moreover, Foton Motor also expects the share issuance to help it improve its capital strength, promote its strategic deployment and product reserve for the technology updates and structure upgrades regarding the electrification and intelligence development of the automotive industry.