- GDS Holdings (GDS, Financial) has announced a multi-faceted financing strategy involving three simultaneous offerings.
- The company plans to offer $450 million in convertible senior notes due 2032, with an option for an additional $50 million.
- A primary offering of 5.2 million American Depositary Shares (ADSs) is also proposed, with an option for 780,000 additional ADSs.
GDS Holdings Limited (NASDAQ: GDS; HKEX: 9698), a prominent Chinese data center operator, revealed a complex financing plan that includes a series of concurrent offerings. These offerings are structured to raise significant capital for the company's operations.
The simultaneous offerings include a Delta Placement of borrowed American Depositary Shares (ADSs), a $450 million convertible senior notes offering with the potential for a $50 million increase, and a primary ADS offering of 5.2 million shares with an additional 780,000 ADSs option. This strategy aims to provide flexible financing avenues while maintaining shareholder value under U.S. GAAP standards by avoiding earnings per share dilution.
In the Delta Placement, an affiliate of the underwriter, likely J.P. Morgan, will receive the proceeds from the borrowed ADSs, while GDS will gain a nominal lending fee. The proceeds from the Delta Placement are directed towards derivative transactions that facilitate hedging for note investors.
Each of the three offerings is interdependent, meaning they must all successfully close, or they will all be terminated. This all-or-nothing approach indicates GDS's strategic emphasis on this financing package's comprehensive execution.
The market's reception of these securities will largely determine the impact on GDS Holdings' competitive stance in the data center sector, reliant on investor interest and the effective deployment of acquired capital.
