BYD , backed by US investment titan Warren Buffett, has said it plans to sell up to CNY6bn (US$938.8m) in bonds to repay loans and boost its coffers.

The announcement comes after BYD reported this week that first-half net profit slumped 89% on year to CNY275.4m due to stiff competition and the cancellation of government subsidies for car purchases.

It said the bonds will have a maximum maturity of 10 years and the issuance is subject to shareholder and regulatory approval, according to a statement filed to the stock exchange in the southern Chinese city of Shenzhen cited by news agency AFP.

The proceeds “will provide the company with a source of medium and long-term” funding and will be used to “repay bank loans and supplement the company’s working capital,” it said.

BYD said its first-half car sales dropped by 23.4% year on year to 220,131 units.

It expects net profit for the first nine months to range from CNY121.6m to CNY364.9m, a slump of 85% to 95% from the CNY2.4bn recorded in the same period last year.