New bond issue signals Kingsoft's investment push
Mainland firm seeks HK$2.3 billion from second convertible bond issue, tapping the market for cheap funds for asset building and acquisitions
Mainland software company Kingsoft Corp, in which internet giant Tencent is a major shareholder, plans to issue HK$2.33 billion in convertible bonds as it eyes potential investments and acquisitions.
The proposed deal would mark Beijing-based Kingsoft's second major debt issue following the HK$1.36 billion convertible bond offering in July last year. Those bonds are due in 2018.
In a filing with the Hong Kong stock exchange yesterday, Kingsoft co-founder and chairman Lei Jun said the issue of bonds "can provide the company with additional funds at lower [financing] cost".
The company's latest bond offering carries interest of 1.25 per cent per annum, payable semi-annually. They will mature in 2019.
Pricing for each conversion share has been set at HK$43.89, which represents a premium of 40 per cent on the stock's close of HK$31.35 on Thursday.
Earlier this week, Kingsoft pushed forward its spin-off of Cheetah Mobile, the business unit formerly known as Kingsoft Internet Software, which plans to raise US$300 million from its proposed initial public offering on the New York Stock Exchange.