Bilibili Inc. Announces Repurchase Right Notification for 1.375% Convertible Senior Notes due 2026

Rhea-AI Summary

Bilibili Inc. announces the repurchase of its 1.375% Convertible Senior Notes due 2026, giving holders the right to require repurchase of their Notes in cash. The Repurchase Right period is from February 29, 2024, to March 28, 2024, with a repurchase price of 100% of the principal amount plus accrued interest. As of February 20, 2024, there is $429,343,000 in aggregate principal amount outstanding.

Insights

Financial Analyst

An analysis of Bilibili Inc.'s announcement regarding the repurchase option for its Convertible Senior Notes reveals a strategic financial maneuver that could impact the company's cash reserves and debt structure. The option for noteholders to demand repurchase reflects a contractual agreement set during the issuance of these instruments, typically introduced to provide investors with an exit opportunity prior to maturity. The repurchase price, set at 100% of the principal plus accrued interest, indicates a premium return for investors, assuming the market price is below par. This could potentially lead to a cash outflow of up to US$429,343,000 from Bilibili's reserves if all noteholders exercise this right.

For stakeholders, the immediate effect would be a reduction in the company's leverage, assuming the repurchase is financed through existing cash reserves. However, this could also diminish the company's liquidity, potentially affecting its ability to fund operations or invest in growth opportunities. The timing of this announcement, coupled with the SEC filing, suggests a transparent approach to fulfilling corporate obligations, which could be perceived positively by investors and could influence Bilibili's stock performance on NASDAQ and HKEX.

Debt Market Analyst

The repurchase announcement by Bilibili Inc. is a significant event in the debt market, particularly for convertible securities. Convertible notes are hybrid instruments that offer investors the option to convert debt into equity at specified terms. The fact that Bilibili is offering a cash repurchase rather than conversion suggests the company is seeking to manage its dilution risk or possibly that its stock price is currently below the conversion threshold, making the cash repurchase more attractive to noteholders.

From a market perspective, the repurchase offer could lead to a temporary increase in demand for the notes, as investors may buy the notes on the secondary market to tender them for repurchase. This could affect the notes' trading value leading up to the deadline. Additionally, the repurchase event will need to be closely monitored by market participants for indications of investor sentiment towards the company's creditworthiness and future outlook.

Corporate Governance Expert

The decision by Bilibili's board to not make a recommendation to noteholders on the exercise of the Repurchase Right adheres to standard corporate governance practices, ensuring neutrality and avoiding potential conflicts of interest. This hands-off approach empowers noteholders to make an independent judgment based on their assessment of the company's performance and prospects. It is also a compliance measure with SEC regulations, which require full disclosure without undue influence from the company.

Such corporate actions are closely watched by governance analysts as they reflect the company's adherence to contractual obligations and regulatory standards, which can have broader implications for investor confidence and the company's reputation in the capital markets.

SHANGHAI, China, Feb. 20, 2024 (GLOBE NEWSWIRE) -- Bilibili Inc. (“Bilibili” or the “Company”) (NASDAQ: BILI and HKEX: 9626), an iconic brand and a leading video community for young generations in China, today announced that it is notifying holders of its 1.375% Convertible Senior Notes due 2026 (CUSIP No. 090040AB2) (the “Notes”) that, pursuant to the Indenture dated as of April 5, 2019 (the “Indenture”) relating to the Notes by and between the Company and Deutsche Bank Trust Company Americas, as trustee, each holder has the right, at the option of such holder, to require the Company to repurchase all of such holder’s Notes or any portion thereof that is an integral multiple of US$1,000 principal amount for cash on April 1, 2024 (the “Repurchase Right”). Holders of the Notes may exercise the Repurchase Right from 12:01 a.m., New York City time, on Thursday, February 29, 2024 until 5:00 p.m., New York City time, on Thursday, March 28, 2024.

As required by rules of the United States Securities and Exchange Commission (the “SEC”), the Company will file a Tender Offer Statement on Schedule TO today. In addition, documents specifying the terms, conditions, and procedures for exercising the Repurchase Right will be available through the Depository Trust Company and the paying agent, which is Deutsche Bank Trust Company Americas. None of the Company, its board of directors, or its employees has made or is making any representation or recommendation to any holder as to whether to exercise or refrain from exercising the Repurchase Right.

The Repurchase Right entitles each holder of the Notes to require the Company to repurchase all of such holder’s Notes, or any portion thereof that is an integral multiple of US$1,000 principal amount. The repurchase price for such Notes will be an amount in cash equal to 100% of the principal amount of the Notes to be repurchased, plus accrued and unpaid interest to, but excluding, April 1, 2024, which is the date specified for repurchase in the Indenture (the “Repurchase Date”), subject to the terms and conditions of the Indenture and the Notes. The Repurchase Date is an interest payment date under the terms of the Indenture and the Notes. Accordingly, on Monday, April 1, 2024, the interest payment date, the Company will pay accrued and unpaid interest on all of the Notes through March 29, 2024 to all holders who were holders of record as of close of business on Friday, March 15, 2024, regardless of whether the Repurchase Right is exercised with respect to such Notes. On the Repurchase Date, there will be no accrued and unpaid interest on the Notes. As of February 20, 2024, there was US$429,343,000 in aggregate principal amount of the Notes outstanding. If all outstanding Notes are surrendered for repurchase through exercise of the Repurchase Right, the aggregate cash purchase price will be US$429,343,000.

In order to exercise the Repurchase Right, a holder must follow the transmittal procedures set forth in the Company’s Repurchase Right Notice to holders (the “Repurchase Right Notice”), which is available through the Depository Trust Company and Deutsche Bank Trust Company Americas. Holders may withdraw any previously tendered Notes pursuant to the terms of the Repurchase Right at any time prior to 5:00 p.m., New York City time, on Tuesday, March 28, 2024, which is the second business day immediately preceding the Repurchase Date. If a holder has tendered any Notes pursuant to the Repurchase Right, such Notes cannot be converted unless the holder withdraws the tender in accordance with the terms of the Indenture.

This press release is for information only and is not an offer to purchase, a solicitation of an offer to purchase, or a solicitation of an offer to sell the Notes or any other securities of the Company. The offer to purchase the Notes will be only pursuant to, and the Notes may be tendered only in accordance with, the Company’s Repurchase Right Notice dated February 20, 2024 and related documents.

Holders of the Notes should refer to the Indenture for a complete description of repurchase procedures and direct any questions concerning the mechanics of repurchase to the Trustee by contacting Deutsche Bank Trust Company Americas. Holders of Notes may request the Company’s Repurchase Right Notice from the paying agent, at Deutsche Bank Trust Company Americas, c/o DB Services Americas Inc., 5022 Gate Parkway Suite 200, MS JCK01-218, Jacksonville, FL 32256.

HOLDERS OF NOTES AND OTHER INTERESTED PARTIES ARE URGED TO READ THE COMPANY’S TENDER OFFER STATEMENT ON SCHEDULE TO, REPURCHASE RIGHT NOTICE, AND OTHER RELEVANT DOCUMENTS FILED WITH THE SEC WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT BILIBILI INC. AND THE REPURCHASE RIGHT.

Materials filed with the SEC will be available electronically without charge at the SEC’s website, http://www.sec.gov. Documents filed with the SEC may also be obtained without charge at the Company’s website, http://ir.bilibili.com.

About Bilibili Inc.

Bilibili is an iconic brand and a leading video community with a mission to enrich the everyday lives of young generations in China. Bilibili offers a wide array of video-based content with All the Videos You Like as its value proposition. Bilibili builds its community around aspiring users, high-quality content, talented content creators and the strong emotional bonds among them. Bilibili pioneered the “bullet chatting” feature, a live comment function that has transformed our users’ viewing experience by displaying the thoughts and feelings of audience members viewing the same video. The Company has now become the welcoming home of diverse interests among young generations in China and the frontier for promoting Chinese culture across the world.

For more information, please visit: http://ir.bilibili.com.

For investor and media inquiries, please contact:

In China:

Bilibili Inc.
Juliet Yang
Tel: +86-21-2509-9255 Ext. 8523
E-mail: ir@bilibili.com

Piacente Financial Communications
Helen Wu
Tel: +86-10-6508-0677
E-mail: bilibili@tpg-ir.com

In the United States:

Piacente Financial Communications
Brandi Piacente
Tel: +1-212-481-2050
E-mail: bilibili@tpg-ir.com

FAQ

What is Bilibili Inc. announcing regarding its Notes?

Bilibili Inc. is announcing the repurchase of its 1.375% Convertible Senior Notes due 2026.

What is the Repurchase Right period for the Notes?

The Repurchase Right period is from February 29, 2024, to March 28, 2024.

What is the repurchase price for the Notes?

The repurchase price is 100% of the principal amount of the Notes plus accrued and unpaid interest.

How much is the aggregate principal amount of the Notes outstanding as of February 20, 2024?

As of February 20, 2024, there is $429,343,000 in aggregate principal amount outstanding.

Where can holders find the Repurchase Right Notice?

Holders can find the Repurchase Right Notice through the Depository Trust Company and Deutsche Bank Trust Company Americas.