French tire maker Michelin says it is raising 1.2 billion euros ($1.6 billion) through the sale of new shares to fund investments and improve its finances.

The company says shareholders will be offered two new shares for every 11 shares owned, at a price of euro45 per share.

Shares in the company slumped 8.5 percent to 59.71 euros Tuesday morning in Paris after the announcement.

The stock sales period will run from Sept. 30 to Oct. 13 and the new shares will begin trading on the Paris stock exchange on Oct. 25, Michelin said in a statement Tuesday.