Alibaba Pictures, the film unit of Chinese e-commerce giant Alibaba, is looking forward to raise $1.6 billion by selling 4.2 billion new shares in Hong Kong in order to help finance future media-related acquisitions.

Alibaba's Hong Kong-listed film production unit wants to raise at least HK$12.1bn ($1.6bn) from a share placement; the ecommerce group intends to spend the amount on acquisitions.

The Alibaba Pictures is a majority owned by the Chinese ecommerce group. There are no specific takeover targets mentioned by it, however it is looking forward to a determined expansion in China's film industry.

Alibaba Pictures said in a regulatory statement, "The company intends to use the net proceeds from the Placing for general working capital purposes and to finance potential acquisitions arising out of media related investment opportunities that may arise in the future". It added that the company has so far not identified any particular acquisition targets.

This year, shares of Ali Pictures increased 160% in the middle of hope regarding positioning of the company as a big player at the China box office.

There was an increase in shares after an announcement made in April about consideration of injecting assets by parent Alibaba together with its production financing division and movie ticketing business into the film subsidiary.

On Thursday, Alibaba Pictures said in a statement to the Hong Kong stock exchange that it would place 4.2bn shares at HK$2.90 each, i. e. a 20% discount to last traded price of the stock, which was HK$3.62 at Monday's close, and approximately 13% less than the average closing price over the previous five sessions. The shares of the company dropped as much as 11% on Thursday morning.