(Yicai Global) July 13 -- Zotye Automobile's stock tumbled after the troubled Chinese carmaker said it has abruptly terminated its plan to raise CNY6 billion (USD837 million) through a private placement of shares.

Zotye [SHE: 000980] closed 8.5 percent lower at CNY3.43 (48 US cents) apiece today, after earlier sinking by as much as 9.9 percent. The stock has soared about 40 percent this month.

After careful consideration of the changes in the external market environment, the company's situation, and changes with its actual controller, Zotye has decided to terminate the issuance of additional shares to specific investors, the Yongkang-based firm said yesterday. The application was withdrawn after communication with intermediaries and other relevant parties, it added.

The funds would have been used for new energy vehicle research and development projects, building sales channels, and supplementary working capital, Zotye announced in June last year.

On June 29, Zotye said its actual controller may change, leading to its stock soaring. Huang Jihong, chairman of Pang Da Automobile Trade and Zotye's actual controller, took over the reconstructing process of the bankrupt carmaker in December 2021, holding a 24 percent stake with people acting in concert. He stepped down as chairman of Zotye in May.

After receiving Huang's capital injection, Zotye resumed production last October after being closed for nearly three years, but its net loss still widened 29 percent to CNY909 million (USD126.8 million) last year from 2021. Its first-quarter loss was CNY188 million.

Pang Da, once China's largest car dealer, reported a net loss of CNY1.4 billion last year, making it hard to support Zotye. The Shanghai Stock Exchange terminated its shares on June 30 after closing below CNY1 (14 US cents) for 20 straight trading days.

Stocks should be booted from Chinese mainland exchanges if their price stays below CNY1 for 20 straight trading days, according to regulations.

Zotye expects to remain in the red in the first half of this year, it added yesterday, without disclosing further details.

Editor: Martin Kadiev