GDS Holdings Limited Initiates Public Offering for ADSs

GDS Holdings Limited Announces Public Offering of ADSs

GDS Holdings Limited (“GDS Holdings”, “GDS” or the “Company”) (NASDAQ: GDS; HKEX: 9698) is stepping into a significant phase with the announcement of a proposed public offering. This offering involves 5,200,000 American Depositary Shares (ADSs), with each ADS representing eight Class A ordinary shares, valued at US$0.00005 per share. The offering is set to depend on market conditions and will be executed through a registered public offering, termed the Primary ADSs Offering. Notably, the underwriters are granted a 30-day option to acquire an additional 780,000 ADSs.

Financial Plans Post-Offering

The objective behind the Primary ADSs Offering is clear; GDS Holdings aims to utilize the net proceeds to bolster its general corporate activities, meet working capital requirements, and refinance existing debts. This includes potential negotiated repurchases or redemptions related to convertible bonds that are due in 2029. This strategic move demonstrates the Company’s commitment to maintaining financial health and flexibility.

Details on the Notes Offering

In addition to the Primary ADSs Offering, GDS also declared a proposed offering of convertible senior notes that totals an aggregate principal amount of US$450 million, due in 2032. This offering will be made privately to institutional buyers in compliance with Rule 144A of the Securities Act. To support this initiative, GDS anticipates permitting initial purchasers an option to secure an additional US$50 million in notes within a specified timeframe following the date of issuance.

Supporting Derivative Transactions

To facilitate privately negotiated derivative transactions among noteholders, the Company is initiating a separate registered public offering involving the lending of ADSs termed the Delta Placement of Borrowed ADSs. These borrowed shares will be lent to an affiliate of an initial purchaser within the Notes Offering, allowing investors to hedge their positions effectively. While GDS will provide these ADSs, it will not receive proceeds from the sale of these borrowed shares but will charge a nominal lending fee.

Market Impact and Considerations

Such offerings inherently influence market dynamics, and GDS Holdings acknowledges that these transactions could sway the market price of its ADSs. The offerings and transactions are all interconnected; hence the close of the Notes Offering is essential for the consummation of the Primary ADSs Offering and vice versa. If any offering does not proceed, it may lead to a complete cancellation of the others.

Management and Registration

Top-tier financial institutions, including J.P. Morgan, BofA Securities, Morgan Stanley, and UBS Investment Bank, have joined forces as joint book-running managers for this offering. GDS Holdings has duly filed an automatic shelf registration statement with the SEC to ensure compliance and transparency, and accessible prospectus supplements related to this offering will be made available.

About GDS Holdings Limited

GDS Holdings Limited (NASDAQ: GDS; HKEX: 9698) stands out as a key player in the development and operation of state-of-the-art data centers in China. The Company's strategic facilities are situated at the heart of critical economic areas, catering to the surging demand for high-performance data services. These centers boast expansive net floor areas, impressive power capabilities, and robust efficiency. Being carrier and cloud-neutral allows GDS's clientele to connect seamlessly with major telecom networks and the leading public cloud services.

With a rich 24-year legacy, GDS continues to meet the diverse needs of a vast range of customers, from hyperscale cloud providers to large multinationals, enabling them to scale and expand their operations effortlessly. Additionally, GDS holds a 35.6% equity interest in DayOne Data Centers Limited, enhancing its market reach overseas.

Frequently Asked Questions

What is the purpose of GDS Holdings' public offering?

The public offering aims to raise capital for corporate activities, working capital, and refinancing existing debts.

Who are the underwriters managing the ADS offering?

J.P. Morgan, BofA Securities, Morgan Stanley, and UBS Investment Bank are joint book-running managers for the offering.

What are the terms of the convertible senior notes offering?

The offering of convertible senior notes is for a total of US$450 million due in 2032, with potential options for initial purchasers.

How does the Delta Placement of Borrowed ADSs work?

This involves lending ADSs to facilitate derivative transactions among noteholders, where GDS does not receive proceeds from these transactions.

What is GDS Holdings known for?

GDS is recognized as a leading developer and operator of high-performance data centers in China, catering to major tech and service companies.

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