The video platform will raise US$700 million through zero-coupon notes maturing in 2031, with Tencent taking US$200 million, and pair the sale with a delta equity placement and buybacks of up to US$300 million. Proceeds fund the repurchases and AI development, while the Tencent buyback needs approval from disinterested shareholders at an extraordinary general meeting.
Bilibili plans to sell US$700 million of zero-coupon convertible notes due 2031, with Tencent subscribing US$200 million of the offering.
The Shanghai-based video platform said it will use the proceeds to fund two concurrent share repurchases totaling US$300 million and to expand its AI capabilities in content comprehension, recommendation and creation, plus general corporate purposes.
The notes, offered to non-U.S. qualified institutional buyers under Regulation S, mature Sept. 15, 2031 and convert into Class Z ordinary shares. Tencent, through a subsidiary, will subscribe US$200 million on the same terms and at the same initial price as the US$500 million marketed to other investors. The company will not issue new shares in the concurrent equity placement, which pairs a delta offering of borrowed shares with Tencent's planned sale of about US$400 million of Class Z shares.
Bilibili expects to repurchase about US$100 million of the borrowed shares and US$200 million of shares held by Tencent at the placement's reference price, under a special program of up to US$300 million authorized by its board. The Tencent repurchase requires approval at an extraordinary general meeting by three-fourths of votes cast by disinterested shareholders.
The structure lets Bilibili raise cash while Tencent, already a strategic holder of Chinese internet assets, deepens its stake in the video platform that trades on Nasdaq as BILI and on the Hong Kong exchange as 9626. The zero-coupon design defers interest cost, while the conversion feature and the delta offering expose existing holders to dilution if the shares rally above the conversion price before 2031.
The company can redeem the notes for cash on or after Sept. 28, 2029 if the share price holds at least 130 percent of the conversion price for 20 trading days within any 30-day stretch, and holders can force a repurchase on Sept. 15, 2029 or on certain fundamental changes. The offerings remain subject to market conditions, completion of the marketed notes sale and shareholder approval, with the company saying there is no assurance the transactions will close.
The deal tests appetite for Chinese tech paper at a time when Beijing's support for the sector has lifted valuations across peers such as Kuaishou and iQiyi. Investors will watch the pricing of the notes and the reference price set through the bookbuilding, which determines the conversion price and the cost of the buybacks, for the clearest read on how the market values Bilibili's equity.
This article is for informational purposes only and does not constitute investment advice.
