Bilibili launches $ 621 million offer as Chinese technologies exploit markets after IPOs

HONG KONG (Reuters) – China's Bilibili video platform on Tuesday launched a convertible bond sale and a consecutive equity investment that could yield about $ 621 million, allowing a return to the capital markets a little more a year after its IPO in New York.

Bilibili, one of China's leading online video and entertainment sharing platforms, announced the fundraiser on Tuesday, but did not reveal detailed conditions.

The company currently sells a convertible bond worth $ 300 million over seven years and 17.1 million shares, of which $ 10.55 million are primary shares and the rest comes from a existing shareholder, according to a list of conditions consulted by Reuters.

The subsequent offer could generate about $ 321 million on the basis of the closing price of Bilibili, set at $ 18.8 on Monday. Its shares have increased by 32% so far in 2019.

This year has already seen other Chinese companies listed in the United States return to the capital markets to raise additional funds, whether through convertible bonds or subsequent offers, in search of more capital growth.

The Chinese electric vehicle manufacturer NIO, the video streaming company iQIYI and the e-commerce company Pinduoduo, all 2018 IPOs, have returned to the market to raise funds.

The convertible bond of Bilibili is marketed with a coupon range between 1.375% and 1.875%, while the conversion premium – the price at which buyers can convert their bonds into shares of the company – will range from 32, 5% and 37.5%, according to the terms shown.

Convertible bonds are a less expensive avenue of financing because of the reduction of their coupons in exchange for the grant to the holder of the obligation to convert the debt into shares at a fixed price in the future.

Companies in the technology sector find them particularly attractive because normal debt costs them more, especially if they are not rated yet, such as Bilibili.

Qiming Venture Partners is the seller shareholder in Bilibili, according to the terms of the job offer.

The company raised $ 483 million during its initial public offering for Nasdaq last March.

Bilibili plans to use Tuesday's offer product to enrich content offerings, research and development and potential acquisitions, investments and strategic alliances.

The deal will close after the US markets close on Tuesday.

Bank of America, Merrill Lynch, Citigroup, Credit Suisse, JPMorgan and Morgan Stanley are co-owners of the Bilibili Offer.