Zhipu Launches $5 Billion Financing, Including $2 Billion in Equity and $3 Billion in Convertible Bonds

Zhipu has initiated a placement of approximately $2 billion in Hong Kong stocks and an issuance of approximately $3 billion in convertible bonds, totaling around $5 billion in financing. Zhipu will issue 21.97 million new shares at a placement price of HKD 714 per share, which is about 10% lower than the closing price of HKD 793 on September 11. Additionally, it will issue zero-coupon convertible bonds worth RMB 20.14 billion (approximately $3 billion), maturing in September 2027. The issuance price of the convertible bonds will be between 100% and 100.5% of the face value, corresponding to a yield of -0.5% to 0%, with an initial conversion price of HKD 892.5, representing a 25% premium over the placement price. The proceeds from the financing will primarily be used for research and development, computing resources, and related infrastructure, as well as for business expansion, strategic investments, potential mergers and acquisitions, working capital, and other corporate purposes. The stock placement and convertible bond issuance will occur simultaneously, but the completion of the two transactions is not interdependent.

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