The new energy vehicle unit of one of China's largest property developers China Evergrande is seeking to raise up to HK$3.99 billion, or roughly $516.1 million, through a new private share placement. The subsidiary, China Evergrande New Energy Vehicle Group, announced that it intends to sell part of its shares to a group of investors that will include Tencent Holdings and Yunfeng Capital.

The electric automotive manufacturing company stated that it will be selling as many as 176.6 million shares during the private share placement. In a filing with the Hong Kong Stock Exchange on Tuesday, Evergrande New Energy Vehicle revealed that at least six investors have expressed interest in purchasing its shares. Apart from Tencent and Yunfegn Capital, Didi Chuxing and Sequoia Capital will also be joining the funding round.

In its filing, the company revealed that it will be selling its shares at HK$22.65 per share. This represents a 20 percent discount on the company's closing share price on Monday. The 176.6 million shares represent about 2 percent of the company's total shares.

China Evergrande New Energy's share priced in Hong Kong dropped by over 11 percent on Tuesday, closing at HK$25.05 per share. The stock rebounded slightly on Wednesday, opening at HK$26.40 per share in early morning trading. Investors have expressed concerns over the value of the company's already issued shares, which might be diluted due to the private share placement.

Since the start of the year, the company's share prices have ballooned by about 264 percent. The company, which was renamed from China Evergrande Health Industry Group, has yet to report a profit. For the first half of 2020, the company reported a pre-tax loss of 2.68 billion yuan, or roughly $389 million. This was a massive jump from the 1.96 billion yuan loss the company reported over the same period last year.

China Evergrande New Energy, which is controlled by China's third-richest man, Hui Ka-yan, was established back in mid-2018. It began its venture into the country's new energy vehicle sector through a series of acquisitions of several foreign technologies, battery producers and intellectual properties. In August of last year, the company unveiled the first of six new Hengchi-branded fully-electric models. China Evergrande New Energy plans to begin mass production of its new products during the second half of 2021.