BYD Co., the Shenzhen-based automaker partially owned by Warren Buffett’s Berkshire Hathaway Inc., will raise HK$4.27 billion (US$550 million) in its biggest stock sale since its 2002 initial public offering.

    In a statement late Friday, BYD said it has agreed to sell 121.9 million new shares at an offering price of HK$35 to institutional investors, representing a discount of 15 percent from the closing price of HK$41.15 during the morning session.

    The funds will give BYD room to step up investments and bolster production of electric vehicles as governments worldwide step up efforts to fight pollution. Selling shares will also help alleviate the strain on a balance sheet saddled with surging debt.

    The sale comes after BYD said that profit tumbled 89 percent in the first quarter because of declining demand for its gasoline-fueled vehicles.

    Last year, profit jumped almost sevenfold after billionaire founder and chairman Wang Chuanfu completed a three-year reorganization during which he cut the number of dealerships and narrowed losses at the solar business with the aid of State incentives.

    Though it is considered a pioneer in China’s electric vehicle industry, BYD has been struggling to sell its all-electric car, the e6, both domestically and abroad. Instead, the company has looked to taxi fleets to build demand.

    Sales of electric cars, buses and plug-in hybrid vehicles have been slow since BYD entered the market in 2006, using in-house technology financed by selling gasoline vehicles and mobile phone batteries. (SD-Agencies)