(Yicai Global) Feb. 27 -- Contemporary Amperex Technology plans to raise CNY20 billion (USD2.8 billion) in a private placement of shares to finance an increase in capacity at its three plants in China. The world's largest electric vehicle battery maker will also build a new CNY10 billion factory with undisclosed funding.

The money raised will go to boost output in eastern, southeastern, and southwestern China and to replenish working capital, Ningde-based CATL said in a statement yesterday. It didn't say when the shares, which will trade on the Shenzhen Stock Exchange, would be issued.

A private placement is a standard way for a company to raise business capital. If the firm is public, its stock price may decline after an announcement of a private placement since its existing shares will be diluted.

CATL's stock price [SHE:300750] fell 2.2 percent today to close at CNY149.48 (USD21.30). The benchmark Shenzhen Component Index gained 0.3 percent.

The firm has over half of China's new energy vehicle battery-making market share and has been forming more global partnerships in the past year. Last month, US automaker Tesla said that it will join CATL's list of clients, a group that already includes Germany's BMW and Daimler.

CATL will construct a new 87-hectare battery plant in its home town, expecting it to be ready in two years, it said, without disclosing details about the intended output and source of investment. 

The firm will spend CNY4.6 billion to expand annual production capacity at its Ningde factory to around 16 gigawatt-hours. It will also need CNY7.4 billion to reach about 24 GWh of output at its Jiangsu province plant. In Sichuan province, the company will use CNY4 billion to achieve 12 GWh in two years.

Editor: Emmi Laine