China’s Gome Retail to raise $200m through debt sale to Pinduoduo

The Pinduoduo logo. Photographer: Qilai Shen/Bloomberg

Chinese electronics retailer Gome Retail Holding on Sunday said it would raise $200 million through a convertible bond issue that will be entirely taken up by e-commerce platform Pinduoduo.

The deal comes as the COVID-19 pandemic, which first emerged in China last December, has sent a shudder through the global retail industry.

Pinduoduo also earlier this month raised $1.1 billion in a private share placement and the deal will mark its first investment in another company since the e-commerce platform was founded in 2015.

The bonds will carry a coupon of 5% per annum and a tenure of 3 years, which Pinduoduo can opt to extend by two years, Pinduoduo said in a separate statement.

They are convertible at HK$1.215 per share, 66.4% higher than the electronics retailer’s closing share price of HK$0.73 on Friday, and 1.28 billion Gome shares or about 5.6% of its existing issued share capital, will be alloted, they said.

“Gome wins because they can broaden their access to our 585.2 million users and PDD wins because we enhance our foothold in household appliances and electronics,” Pinduoduo’s Vice President of Strategy David Liu said.

Gome said “the subscription offers a good opportunity to raise additional funds to strengthen the financial position and broaden the capital base of the group so as to facilitate its future development”.

The two companies on March 31 jointly held a promotion to give away 500 million yuan worth of discounts and consumption subsidies on more than 6,000 items, joining other firms such as Suning.com and Alibaba Group Holdings’ Alipay that have rolled out similar campaigns to try and stimulate consumption during the virus outbreak.

Reuters

Singapore Reporter/s

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Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.