(Yicai Global) July 12 -- EHang Holdings, a leading Chinese maker of autonomous vertical take-off and landing vehicles, said it plans to raise USD23 million through a private placement of shares led by Korean pop music producer Lee Soo Man.

Headed up by Lee, the founder and former executive producer of South Korea’s SM Entertainment, a number of strategic investors have subscribed for EHang’s new shares, the Guangzhou-based startup announced today.

The funds raised will go to working capital and general corporate purposes, enabling the acceleration of strategic plans for technology advancement, business development, and post-certification commercial operations, it added.

EHang and Lee will collaborate to drive the development of the company’s Urban Air Mobility business in the Asia-Pacific region, leveraging each other’s strengths, it added.

Formed in 2014, EHang develops autonomous flying vehicles for various uses, including manned transportation, logistics, city management, and aerial media. It went public in December 2019.

The company’s shares [NASDAQ: EH] were up 2.9 percent at USD15.90 apiece in premarket trading in New York as of 7.06 a.m. local time today. They fell 5.2 percent yesterday, brining EHang’s decline from a record high in February 2021 to nearly 90 percent.

EHang has yet to turn a profit. Its net loss widened 4.5 percent to CNY328 million last year from the year before, while revenue sank 22 percent to CNY44.3 million, according to its annual earnings report.

The private placement is expected to close in the third quarter of this year, subject to regulatory review and customary closing conditions, according to the company.

Editor: Martin Kadiev