Xiaomi announced plans to raise USD 855 million in a convertible bond issue and another USD 3.1 billion in an underwritten share issue. The proceeds will be used for working capital and investments.
The company’s shares fell 7 percent on the news to HKD 24.30. The new shares were sold at HKD 23.70 each, which is a discount of 9.4 percent on the closing price the day before the sale was announced. The issue is equal to 4.1 percent of outstanding shares and 1.5 percent of voting rights.
The bonds are convertible to Xiaomi shares at an initial price of HKD 36.74, which is a 40 percent premium on Xiaomi’s average trading price in the past ten days. If converted, the bond would represent around 0.7 percent of its shares outstanding and 0.3 percent of the voting rights in the company.
Xiaomi said it would use proceeds of the issue for working capital, investments to grow its market share in key markets and strategic ecosystem investments.
