COSCO Shipping Development Co Ltd on Tuesday night announced a proposed nonpublic issuance of about 3.28 billion shares to specific investors, including its parent company, to raise up to 12 billion yuan ($1.79 billion).

COSCO Shipping Development will become a financing platform of its parent company－China Cosco Shipping Corp, the country's largest shipping company, according to its public statement.

The company will use 6 billion yuan and 2.4 billion yuan from the proceeds for the capital injection into two of its subsidiaries, COSCO Shipping Leasing Co Ltd and Florens International respectively, while it will also use 1.8 billion yuan for the redemption of maturing corporate bonds and 1.8 billion yuan to refill the working capital of the company.

The Shanghai-headquartered Cosco Shipping Development, formerly known as China Shipping Container Lines Co Ltd, mainly operates supply chain integrated financial services. It was established in 1997 and is listed both in Hong Kong and Shanghai. The company had total assets of 101.29 billion yuan by the end of June this year.

Dong Liwan, a shipping industry professor at Shanghai Maritime University, said that the move indicates the company is raising capital to further enlarge its business scale from containership operations to ship leasing, shipping finance, logistics and warehouse services, as well as healthcare and energy businesses.

"They are expected to help the company catch more opportunities likely to come from the Belt and Road Initiative and the development of the Yangtze River Economic Belt," said Dong.

COSCO Shipping Leasing plans to invest 13.8 billion yuan in total into financial leasing assets from 2017 to 2019.

The company's statement also said the new share issuance is conducive to the sustainable development of the company's business and would lay a strong foundation for the company's transformation from a container liner operator into an integrated financial services platform.

Feng Hao, a maritime transportation researcher at the National Development and Reform Commission, said the Chinese government has been keen to support its shipping companies with better-equipped ships and more service options to compete with other established foreign rivals in the world.

"Free trade arrangements, including the Regional Comprehensive Economic Partnership and China-Australia Free Trade Agreement, will also offer new growth points for COSCO Shipping Development's container cargo services in the global market," said Feng.