iQIYI, Inc. Announces Repurchase Right Notification for 4.00% Convertible Senior Notes due 2026
iQIYI, a leading provider of online entertainment video services in China, has announced a repurchase right notification for its 4.00% Convertible Senior Notes due 2026. Holders can require the company to repurchase all or part of their notes for cash on August 1, 2024. This repurchase option will be available from July 2, 2024, to July 30, 2024. The repurchase price will be 100% of the principal amount, plus any accrued and unpaid interest up to August 1, 2024. Currently, there is an aggregate principal amount of $395.6 million in notes outstanding. If all notes are repurchased, the total cash purchase price will be approximately $397.6 million. iQIYI will file a Tender Offer Statement on Schedule TO with the SEC and provide detailed procedures for exercising this repurchase right through the Depository Trust Company and Citibank, N.A.
- Holders have a clear exit strategy with the repurchase right.
- Repurchase price set at 100% of the principal amount, ensuring full return of initial investment.
- Accrued and unpaid interest will be included in the repurchase, offering added value.
- Holders can choose to repurchase all or part of their holdings, offering flexibility.
- Potential cash outflow of approximately $397.6 million if all notes are repurchased.
- Repurchase could impact company's liquidity and financial stability.
- No specific guidance or recommendation from the company's board or employees on exercising the repurchase right.
Insights
The announcement of the repurchase right for iQIYI's 4.00% Convertible Senior Notes due 2026 presents several key considerations for stakeholders. This move effectively allows noteholders to sell their notes back to the company for cash, which could impact both liquidity and the company's balance sheet.
From a financial perspective, the total repurchase could amount to approximately
For investors, this could be interpreted as a mixed signal. On one hand, it assures investors of iQIYI's commitment to managing its debt, but on the other, it raises concerns about the potential strain on the company's cash reserves in the short term. Additionally, the fixed repurchase price at
Analyzing the broader implications of this announcement for iQIYI's market position and investor sentiment, it's important to understand the context within the entertainment industry and Chinese market dynamics. iQIYI is a significant player in the competitive online video sector, contending with rivals like Tencent Video and Youku. The option for noteholders to cash out could lead to a perception of uncertainty about future financial stability, especially considering the competitive pressures and the need for continual investment in content and technology.
This repurchase right might also reflect the company's anticipation of market conditions and its strategic positioning. By offering this repurchase right, iQIYI might be looking to manage its debt profile more effectively ahead of potential market fluctuations. For retail investors, it's essential to weigh the potential short-term liquidity impacts against the long-term strategic benefits of a potentially more balanced debt structure.
BEIJING, May 28, 2024 (GLOBE NEWSWIRE) -- iQIYI, Inc. (Nasdaq: IQ) (“iQIYI” or the “Company”), a leading provider of online entertainment video services in China, today announced that it is notifying holders of its
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 Citibank, N.A. 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
The opportunity for holders of the Notes to exercise the Repurchase Right commences, 9:00 a.m., New York City time, on Tuesday, July 2, 2024, and will terminate at 5:00 p.m., New York City time, on Tuesday, July 30, 2024. 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 Citibank, N.A. 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, July 30, 2024, which is the second business day immediately preceding the 2024 Repurchase Date, or as otherwise provided by applicable law.
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 May 28, 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 Terence Yeung, Agency & Trust, Citicorp International Limited (Email: terence.yeung@citi.com). Holders of Notes may request the Company’s Repurchase Right Notice from the paying agent, at Citibank, N.A. 480 Washington Boulevard, 16/F, Jersey City, NJ, New York, 07310, Attention: Ashley Ramos, Citibank Agency & Trust Operations.
HOLDERS OF NOTES AND OTHER INTERESTED PARTIES ARE URGED TO READ THE COMPANY’S SCHEDULE TO, REPURCHASE RIGHT NOTICE, AND OTHER RELEVANT DOCUMENTS FILED WITH THE SEC WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT IQIYI, 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.iqiyi.com/.
About iQIYI, Inc.
iQIYI, Inc. is a leading provider of online entertainment video services in China. It combines creative talent with technology to foster an environment for continuous innovation and the production of blockbuster content. It produces, aggregates and distributes a wide variety of professionally produced content, as well as a broad spectrum of other video content in a variety of formats. iQIYI distinguishes itself in the online entertainment industry by its leading technology platform powered by advanced AI, big data analytics and other core proprietary technologies. Over time, iQIYI has built a massive user base and developed a diversified monetization model including membership services, online advertising services, content distribution, online games, IP licensing, talent agency, online literature, etc.
For further information, please contact:
Investor Relations
iQIYI, Inc.
ir@qiyi.com
FAQ
What is the repurchase right for iQIYI's Convertible Senior Notes due 2026?
When can holders exercise the repurchase right for the IQ Convertible Senior Notes?
How much is the total principal amount of iQIYI's notes outstanding?
What is the repurchase price for iQIYI's Convertible Senior Notes?
How does the repurchase of iQIYI's notes affect its liquidity?
Where can holders find detailed procedures for exercising the repurchase right?
