Hillhouse, STT GDC to invest $505m in US-listed Chinese data centre operator GDS

Photo by Jordan Harrison on Unsplash

GDS Holdings Limited, a Nasdaq-listed developer and operator of data centres in China, is raising $505 million from private equity firm Hillhouse Capital and ST Telemedia Global Data Centres (STT GDC).

The Shanghai-based company will raise the capital through a private placement of newly issued Class A ordinary shares priced at $65 apiece. Hillhouse will subscribe to shares worth $400 million, while STT GDC plans to invest $105 million.

The amount represents about 5.1 per cent of GDS’s total outstanding shares, according to a statement. The transaction, which is expected to complete in the next few days, will see Hillhouse hold a 3.9 per cent stake in GDS, while STT GDC will own approximately 34.2 per cent.

The proceeds will be used to finance GDS’s new data centre development and potential acquisitions, and for other general corporate purposes.

GDS was established in 2001 to develop and operate data centres in major Chinese cities, including Beijing, Guangzhou and Shanghai. The company serves about 640 large and medium-sized enterprises primarily in the fields of internet, cloud computing, and financial services.

The investment comes as new IT infrastructure development in China is increasing, said William Huang, chairman and CEO of GDS, in the statement.

New IT infrastructure, which consists of 5G, AI, industrial internet, and internet of things (IoT), is poised to enjoy accelerated development in China as Beijing steps up its efforts to shore up the national economy.

China-based GDS is mulling a secondary listing in Hong Kong that could raise about $1 billion as early as this year, according to a Bloomberg report, citing people with knowledge of the matter.

If GDS were to proceed with the secondary listing in Hong Kong, the company will follow the footprints of its US-listed domestic counterparts, including China’s largest gaming firm NetEase, e-commerce major JD.com, and Alibaba, which floated the $13 billion blockbuster deal in the Asian financial hub in 2019.

The Bloomberg report said that GDS is in talks with investment banks on the potential offering. Deliberations are preliminary and both the timing and size of the deal could change.

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).   

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  • 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.