Meituan to raise $10b from share sale, convertible bonds for R&D in drone delivery

Photo: Meituan

China’s Meituan is raising up to $10 billion in a share sale and convertible bond deal to help fund the research and development of autonomous delivery vehicles and drone delivery, according to a term sheet seen by Reuters.

Meituan will raise $7 billion in the share sale and sell $3 billion in convertible bonds.

The company declined to comment to Reuters.

The top up equity placement will be priced between HK$265 and $HK274 per share, which is a 5.3% to 8.4% discount compared to its closing price Monday of $289.20.

In that range, with 187 million shares sold $6.4 to $6.6 billion will be raised.

Meituan‘s biggest shareholder Tencent has agreed to subscribe for a further $400 million worth of stock to take the total size of the equity portion of the deal to up to $7 billion.

The convertible bond has a zero coupon rate, which means investors buy the bonds for the prospect of securing future equity gains when the instruments convert into stock. They would also have their principal repaid at maturity if the option to convert into shares is not exercised.

In the term sheet, Meituan said the cash raised would be spent on technology innvoation, including the research and development of autonomous delivery vehicles and drones.

The final price of the shares is expected to be finalised overnight and the stock will start trading in Hong Kong on Tuesday, the term sheet said.

Reuters

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.

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.