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China's Food-Delivery Giant Meituan Raises $10 Billion From Sale of Shares, Convertible Bonds

April 20, 2021 4:28 am

Beijing (PingWest)—Meituan, China’s largest food delivery platform, is raising about $10 billion in a flash sale on Monday of shares and convertible bonds.

The sale of 3.2% of Meituan is in a range of HK$265 ($34) to HK$274 each, a discount of 5.3% to 8.4 % to its closing price of HK$289.20 on Monday, according to a terms sheet seen by the South China Morning Post. The primary, top-up placement of 187 million shares could raise between $6.376 billion and $6.593 billion.

The company is also offering up to $3 billion worth of zero-coupon convertible bonds in two tranches. One is due in 2027 while the other will be due in 2028.

The money raised will support Meituan’s research and development of autonomous-delivery vehicles, drone delivery, and other technology. It will also be used for general corporate purposes.

Chinese tech titan Tencent has undertaken to subscribe Meituan shares worth up to $400 million.

In the latest financial report, Meituan said that it may continue to record operating losses in the next few quarters because it is actively developing community e-commerce business.

Selling shares and convertible bonds is a common tactic adopted by listed internet giants to raise money. Last November, Chinese e-commerce platform Pinduoduo raised $6.1 billion through convertible bonds offering and equity.