China's Didi looks to raise $1.6 billion via asset-backed securities

SHANGHAI (Reuters) - A unit of Chinese ride-hailing firm Didi Chuxing has submitted an application to raise 10 billion yuan ($1.6 billion) through an issuance of asset-backed securities.

Didi, which said in December it had raised $4 billion to support its overseas expansion, did not respond to a Reuters’ request for comment on how the funds would be used.

The funds will be raised by Dirun (Tianjin) Technology Co Ltd, according to a filing published on the Shanghai Stock Exchange’s bond market website. Dirun’s sole shareholder is Didi Chuxing, local government records show.

The state-run Beijing News newspaper, which reported the proposed fundraising on Saturday, cited sources as saying Didi was also preparing to launch a meal delivery business in the eastern city of Wuxi on April 1.

Didi, which holds more than 87 percent of the Chinese private ride-share market, is facing new challengers with several firms including Tencent-backed (0700.HK) meal delivery company Meituan-Dianping announcing plans to launch ride-hailing services.