Zhipu (2513.HK) on Thursday launched a roughly $5 billion fundraising in Hong Kong, combining a new share placement of about $2 billion with a concurrent issuance of about $3 billion in convertible bonds.
The company is placing 21.97 million new shares at HK$714 each. That price represents about a 10% discount to Friday's closing price of HK$793.
Convertible bond terms
The convertible bonds carry zero interest and mature in September 2027. They are denominated in yuan but settled in U.S. dollars. The issue price ranges from 100% to 100.5% of principal, implying a yield of between negative 0.5% and zero.
The initial conversion price is HK$892.50, which is a 25% premium to the placement price. If the stock trades at more than 130% of the conversion price for 20 out of 30 consecutive trading days, the company may redeem all of the bonds starting Feb. 18, 2027.
The share placement and the bond issuance are being conducted at the same time, but neither transaction is conditional on the other.
Bookrunners and use of proceeds
China International Capital Corporation is acting as sole global coordinator. It is also serving as a bookrunner alongside Guotai Junan Securities (Hong Kong).
Zhipu said the proceeds will be used for research and development, computing resources and related infrastructure, and to support expansion, strategic investments, potential acquisitions, working capital and other general corporate purposes.