Bitdeer Announces Pricing of US$150 Million Convertible Notes Offering

Rhea-AI Summary

Bitdeer Technologies Group (Nasdaq: BTDR) has announced the pricing of its public offering of US$150 million in 8.50% convertible senior notes due 2029. The notes will mature on August 15, 2029, with an initial conversion rate of 117.0207 shares per US$1,000 principal amount, equivalent to a conversion price of approximately US$8.55 per Class A ordinary share. This represents a 35% premium over the last reported share price of US$6.33.

The company expects to raise approximately US$144.5 million in net proceeds, which will be used for datacenter expansion, ASIC-based mining rig development, and general corporate purposes. The offering is expected to close on August 20, 2024, subject to customary conditions. BTIG is acting as the sole book-running manager for the offering.

Positive

• Raising US$150 million through convertible notes offering
• Initial conversion price of US$8.55 represents a 35% premium over current share price
• Net proceeds of approximately US$144.5 million to be used for datacenter expansion and mining rig development

Negative

• 8.50% interest rate on convertible notes may increase financial burden
• Potential dilution of existing shareholders if notes are converted to shares

Insights

Financial Analyst

Bitdeer's US$150 million convertible notes offering is a significant move to raise capital. The 8.50% interest rate is relatively high, indicating potential risk or market demand for higher yields. The conversion premium of 35% suggests confidence in future stock appreciation. The US$144.5 million net proceeds will bolster the company's expansion plans, particularly in datacenter growth and ASIC mining rig development. This could strengthen Bitdeer's market position in the competitive blockchain and high-performance computing sector. However, the dilutive effect on existing shareholders and increased debt burden are potential concerns. The optional redemption clause after August 2027 provides flexibility for the company, but also introduces uncertainty for noteholders.

Tech Expert

Bitdeer's focus on datacenter expansion and ASIC mining rig development signals a strategic move to enhance its technological capabilities. This investment could potentially lead to improved efficiency and competitiveness in blockchain mining operations. The development of proprietary ASIC mining rigs could give Bitdeer a significant edge, as custom hardware often outperforms off-the-shelf solutions in the mining industry. However, the rapidly evolving nature of blockchain technology and the cyclical nature of the crypto market pose risks. The success of this investment will largely depend on Bitdeer's ability to stay ahead of technological curves and market trends in the highly volatile crypto mining sector.

Market Research Analyst

The timing of Bitdeer's offering is intriguing, coming amidst a period of cautious optimism in the crypto market. The US$6.33 share price used for conversion calculations reflects current market sentiment. The 150% price trigger for optional redemption indicates the company's bullish long-term outlook. However, the high 8.50% interest rate suggests investors still perceive significant risk in the sector. The inclusion of various redemption options provides flexibility but also complexity for investors. The participation of multiple underwriters, including BTIG as the sole book-running manager, lends credibility to the offering. This capital raise could position Bitdeer more competitively against rivals like Riot Platforms and Marathon Digital, potentially reshaping the competitive landscape in the blockchain infrastructure sector.

SINGAPORE, Aug. 16, 2024 (GLOBE NEWSWIRE) -- Bitdeer Technologies Group (Nasdaq: BTDR) (“Bitdeer” or the “Company”), a world-leading technology company for blockchain and high-performance computing, today announced the pricing of its underwritten public offering (the “Offering”) of US$150,000,000 aggregate principal amount of 8.50% convertible senior notes due 2029 (the “Notes”). The sale of the Notes is expected to close on August 20, 2024, subject to customary closing conditions. The Company also granted the underwriters in the Offering a 30-day option to purchase up to an additional US$22,500,000 aggregate principal amount of Notes on the same terms and conditions, solely to cover over-allotments.

The Notes will be senior, unsecured obligations of the Company and will accrue interest at a rate of 8.50% per year, payable semiannually in arrears. The Notes will mature on August 15, 2029, unless earlier converted, redeemed or repurchased. Holders may convert their notes at their option prior to the close of business on the second scheduled trading day immediately preceding the maturity date. Upon conversion, the Company will pay or deliver to such converting holders, as the case may be, cash, Class A ordinary shares, par value US$0.0000001 per share, of the Company (the “Class A ordinary shares”) or a combination of cash and Class A ordinary shares, at its election. The initial conversion rate will be 117.0207 shares per US$1,000 principal amount of Notes (equivalent to an initial conversion price of approximately US$8.55 per Class A ordinary share and represents a conversion premium of approximately 35% above the last reported sale price of the Class A ordinary shares on August 15, 2024, which was US$6.33), subject to adjustment upon the occurrence of certain events.

Bitdeer may redeem for cash all or any part of the Notes (subject to a partial redemption limitation as described in the indenture that will govern the Notes), at its option, on or after August 20, 2027 and prior to the 41st scheduled trading day immediately preceding the maturity date, if the last reported sale price of the Class A ordinary shares has been at least 150% of the conversion price for the Notes then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period (including the last trading day of such period) ending on, and including, the trading day immediately preceding the date on which Bitdeer provides notice of optional redemption at a redemption price equal to 100% of the principal amount of the Notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date (an “optional redemption”).

In addition, Bitdeer may redeem for cash all but not part of the Notes at any time prior to the 41st scheduled trading day immediately preceding the maturity date if less than US$25,000,000 aggregate principal amount of Notes remains outstanding at such time, at a redemption price equal to 100% of the principal amount of the Notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date (a “cleanup redemption”). Bitdeer may also redeem for cash all but not part of the Notes in the event of certain tax law changes at a redemption price equal to 100% of the principal amount of the Notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date and any additional amounts which would otherwise be payable to such redemption date with respect to such redemption price, as described in the indenture that will govern the Notes (a “tax redemption”).

If Bitdeer undergoes a “fundamental change” (as defined in the indenture that will govern the Notes), subject to certain conditions and a limited exception, noteholders may require Bitdeer to repurchase for cash all or part of their Notes at a repurchase price equal to 100% of the principal amount of the Notes to be repurchased, plus accrued and unpaid interest to, but excluding, the fundamental change repurchase date.

In addition, following certain corporate events that occur prior to the maturity date or following Bitdeer’s delivery of a notice of optional redemption, cleanup redemption or tax redemption, Bitdeer will, in certain circumstances, increase the conversion rate for a holder who elects to convert its Notes in connection with such a corporate event or convert its Notes called (or deemed called) for redemption in connection with such notice of optional redemption, cleanup redemption or tax redemption, as the case may be. Bitdeer will also increase the conversion rate for a holder who elects to convert its notes during the period from, and including, the date that is six months after the last date of original issuance of the notes until the close of business on the business day immediately preceding August 1, 2027 (other than a conversion in connection with a “make-whole fundamental change” (as defined in the indenture that will govern the Notes) or a cleanup redemption or a tax redemption).

Bitdeer estimates that the net proceeds from the Offering will be approximately US$144.5 million (or approximately US$166.3 million if the underwriters exercise their over-allotment option in full), after deducting the underwriters’ discounts and commissions and estimated offering expenses payable by Bitdeer.

The Company intends to use the net proceeds from the Offering for datacenter expansion, ASIC based mining rig development as well as working capital and other general corporate purposes.

BTIG is acting as the sole book-running manager for the Offering. A.G.P./Alliance Global Partners, The Benchmark Company, Needham & Company and Roth Capital Partners are acting as co-managers for the Offering.

The Offering was made pursuant to an effective shelf registration statement on Form F-3 filed with the U.S. Securities and Exchange Commission (the “SEC”), which was declared effective by the SEC on April 2, 2024, New York City time. The final prospectus supplement and the accompanying prospectus related to the Offering will be filed with the SEC and will be available on the SEC’s website at www.sec.gov. Before you invest, you should read the final prospectus supplement and accompanying prospectus and other documents the Company has filed with the SEC for more complete information about Bitdeer and the Offering.

Copies of the final prospectus supplement and the accompanying prospectus related to the Offering may also be obtained from BTIG, LLC by mail at 350 Bush Street, 9th Floor, San Francisco, CA 94104, Attention: Syndicate Department, by phone at (415) 248-2200 or by email at prospectusdelivery@btig.com.

This press release shall not constitute an offer to sell or a solicitation of an offer to purchase any securities, nor shall there be a sale of the securities in any state or jurisdiction in which such an offer, solicitation or sale would be unlawful. The Offering will be made only by means of the prospectus supplement and the accompanying prospectus. This press release contains information about the pending Offering, and there can be no assurance that the Offering will be completed.

About Bitdeer Technologies Group

Bitdeer is a world-leading technology company for blockchain and high-performance computing. Bitdeer is committed to providing comprehensive computing solutions for its customers. The Company handles complex processes involved in computing such as equipment procurement, transport logistics, datacenter design and construction, equipment management, and daily operations. The Company also offers advanced cloud capabilities to customers with high demand for artificial intelligence. Headquartered in Singapore, Bitdeer has deployed datacenters in the United States, Norway, and Bhutan.

Forward-Looking Statements

Statements in this press release about future expectations, plans, and prospects, as well as any other statements regarding matters that are not historical facts, may constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. The words “anticipate,” “look forward to,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “should,” “target,” “will,” “would” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. Such forward-looking statements include, among others, statements relating to Bitdeer’s expectations regarding the completion of the Offering and the expected use of proceeds from the Offering. Actual results may differ materially from those indicated by such forward-looking statements as a result of various important factors, including risks and uncertainties associated with market conditions and the satisfaction of closing conditions related to the proposed Offering, as well as discussions of potential risks, uncertainties and other factors discussed in the section entitled “Risk Factors” in Bitdeer’s annual report on Form 20-F, as well as those discussed in Bitdeer’s subsequent filings with the SEC. You are cautioned not to place undue reliance on these forward-looking statements as there are important factors that could cause actual results to differ materially from those in forward-looking statements, many of which are beyond Bitdeer’s control. Any forward-looking statements contained in this press release speak only as of the date hereof. Bitdeer specifically disclaims any obligation to update any forward-looking statement, whether due to new information, future events, or otherwise. Readers should not rely upon the information on this page as current or accurate after its publication date.

For investor and media inquiries, please contact:

Investor Relations
Yujia Zhai
Orange Group
bitdeerir@orangegroupadvisors.com

Public Relations
Wachsman
Bee Shin
bitdeer@wachsman.com

FAQ

What is the size of Bitdeer's (BTDR) convertible notes offering?

Bitdeer (BTDR) has priced a US$150 million convertible senior notes offering due 2029.

What is the interest rate on Bitdeer's (BTDR) convertible notes?

The convertible notes offered by Bitdeer (BTDR) have an interest rate of 8.50% per year, payable semiannually.

What is the initial conversion price for Bitdeer's (BTDR) convertible notes?

The initial conversion price for Bitdeer's (BTDR) convertible notes is approximately US$8.55 per Class A ordinary share.

When will Bitdeer's (BTDR) convertible notes offering close?

Bitdeer's (BTDR) convertible notes offering is expected to close on August 20, 2024, subject to customary closing conditions.

How does Bitdeer (BTDR) plan to use the proceeds from the convertible notes offering?

Bitdeer (BTDR) intends to use the net proceeds for datacenter expansion, ASIC-based mining rig development, working capital, and other general corporate purposes.