Chinese data-center operator Vnet Group Inc. has successfully raised $430 million in a convertible bond offering maturing in 2030, exceeding its initial target of $400 million.
The Beijing-based company announced the additional funds will be used for investment in wholesale internet data center projects, working capital, and general corporate purposes. The bonds carry a coupon rate of 2.5%, with an initial conversion price set at approximately $13.75, representing a 25% premium over the Wednesday closing price of Vnet’s American depositary receipts (ADRs). The conversion range is between $13.75 and $14.30, according to terms shared with Bloomberg News. Additionally, investors have the option to put the bonds after three years.
Vnet’s ADRs had surged by 132% earlier this year, leading to a market capitalization of $2.9 billion, but the stock fell 5.5% on Thursday following the bond offering.
Operating in over 30 cities across China, Vnet serves more than 7,000 hosting and enterprise customers across various industries. The company reported a revenue of 2.25 billion yuan ($311 million) for the fourth quarter, reflecting an 18% year-over-year increase.
The growing demand for data centers, driven by the global boom in artificial intelligence, is fueling expansion in North and Southeast Asia. According to Cushman & Wakefield, the need for data center infrastructure in these regions is expected to rise by 25% annually through 2028, outpacing the 14% growth projected in the United States.
Goldman Sachs Group Inc. served as the sole global coordinator and bookrunner for the bond sale.
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