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VNET Prices Offering of US$430 Million Convertible Senior Notes due 2030

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VNET Group has announced the pricing of US$430 million convertible senior notes offering due 2030. The notes will bear a 2.50% annual interest rate, payable semi-annually starting October 1, 2025.

The notes are initially convertible at 72.7273 ADSs per US$1,000 principal amount, equivalent to an initial conversion price of US$13.75 per ADS, representing a 25.0% premium above the March 12, 2025 closing price of US$11.00.

Holders can require VNET to repurchase their notes on April 3, 2028, or convert them after a 40-day compliance period. The company plans to use proceeds for wholesale IDC projects, working capital, and general corporate purposes.

VNET Group ha annunciato il prezzo dell'offerta di note convertibili senior per un totale di 430 milioni di dollari USA con scadenza nel 2030. Le note avranno un tasso d'interesse annuale del 2,50%, pagabile semestralmente a partire dal 1 ottobre 2025.

Le note sono inizialmente convertibili a 72,7273 ADS per ogni 1.000 dollari USA di valore nominale, equivalente a un prezzo di conversione iniziale di 13,75 dollari USA per ADS, che rappresenta un premio del 25,0% rispetto al prezzo di chiusura del 12 marzo 2025 di 11,00 dollari USA.

I detentori possono richiedere a VNET di riacquistare le loro note il 3 aprile 2028, o convertirle dopo un periodo di conformità di 40 giorni. L'azienda prevede di utilizzare i proventi per progetti IDC all'ingrosso, capitale circolante e scopi aziendali generali.

VNET Group ha anunciado el precio de la oferta de notas convertibles senior por un total de 430 millones de dólares estadounidenses con vencimiento en 2030. Las notas tendrán una tasa de interés anual del 2.50%, pagadera semestralmente a partir del 1 de octubre de 2025.

Las notas son inicialmente convertibles a 72.7273 ADS por cada 1,000 dólares estadounidenses de monto principal, equivalente a un precio de conversión inicial de 13.75 dólares estadounidenses por ADS, lo que representa una prima del 25.0% sobre el precio de cierre del 12 de marzo de 2025 de 11.00 dólares estadounidenses.

Los tenedores pueden exigir a VNET que recompre sus notas el 3 de abril de 2028, o convertirlas después de un período de cumplimiento de 40 días. La empresa planea utilizar los ingresos para proyectos IDC al por mayor, capital de trabajo y fines corporativos generales.

VNET Group는 2030년 만기의 4억 3천만 달러 규모의 전환 우선채권 발행 가격을 발표했습니다. 이 채권은 연 2.50%의 이자율을 가지며, 2025년 10월 1일부터 반기마다 지급됩니다.

채권은 1,000달러당 72.7273 ADS로 처음 전환 가능하며, 이는 ADS당 13.75달러의 초기 전환 가격에 해당하며, 2025년 3월 12일 종가인 11.00달러에 비해 25.0%의 프리미엄을 나타냅니다.

채권 보유자는 2028년 4월 3일에 VNET에 채권 매입을 요구하거나, 40일의 준수 기간 후에 이를 전환할 수 있습니다. 회사는 수익금을 도매 IDC 프로젝트, 운영 자본 및 일반 기업 목적에 사용할 계획입니다.

VNET Group a annoncé le prix de l'émission de notes convertibles senior d'un montant de 430 millions de dollars américains arrivant à échéance en 2030. Les notes porteront un taux d'intérêt annuel de 2,50%, payable semestriellement à partir du 1er octobre 2025.

Les notes sont initialement convertibles à 72,7273 ADS pour 1 000 dollars américains de montant principal, ce qui équivaut à un prix de conversion initial de 13,75 dollars américains par ADS, représentant une prime de 25,0 % par rapport au prix de clôture du 12 mars 2025 de 11,00 dollars américains.

Les détenteurs peuvent demander à VNET de racheter leurs notes le 3 avril 2028, ou de les convertir après une période de conformité de 40 jours. L'entreprise prévoit d'utiliser les produits pour des projets IDC en gros, du fonds de roulement et des fins corporatives générales.

VNET Group hat den Preis für das Angebot von 430 Millionen US-Dollar an wandelbaren vorrangigen Anleihen mit Fälligkeit im Jahr 2030 bekannt gegeben. Die Anleihen werden einen jährlichen Zinssatz von 2,50% haben, der halbjährlich ab dem 1. Oktober 2025 zahlbar ist.

Die Anleihen sind zunächst wandelbar zu 72,7273 ADS pro 1.000 US-Dollar Nennbetrag, was einem anfänglichen Wandlungspreis von 13,75 US-Dollar pro ADS entspricht, was einen Aufschlag von 25,0% über dem Schlusskurs vom 12. März 2025 von 11,00 US-Dollar darstellt.

Inhaber können VNET am 3. April 2028 auffordern, ihre Anleihen zurückzukaufen, oder sie nach einer 40-tägigen Compliance-Periode umwandeln. Das Unternehmen plant, die Erlöse für Großhandels-IDC-Projekte, Betriebskapital und allgemeine Unternehmenszwecke zu verwenden.

Positive
  • Successful pricing of large US$430 million convertible notes offering
  • 25% premium on conversion price shows confidence in future stock appreciation
  • Flexible conversion terms provide investor-friendly features
Negative
  • Additional debt burden with 2.50% interest rate
  • Potential dilution for existing shareholders upon conversion
  • Convertible arbitrage trading may pressure ADS price

Insights

VNET's $430 million convertible notes offering represents a strategic financial move with balanced implications. The 2.50% interest rate is relatively favorable in the current environment, while the $13.75 conversion price (25% premium over current share price) indicates reasonable market confidence in VNET's future growth trajectory.

This transaction significantly strengthens VNET's balance sheet, providing substantial capital for expansion without immediate dilution concerns. The delayed conversion rights (primarily after October 2029) create a multi-year window for capital deployment before potential dilution impact. If fully converted, the notes would create approximately 31.3 million new ADSs based on the 72.7273 conversion rate, representing roughly 15% of the company's current $2.9 billion market capitalization.

The financing structure offers VNET considerable flexibility. The company retains redemption rights after April 2028, while investors can require repurchase in April 2028, creating balanced optionality. The semi-annual interest payments amount to roughly $10.75 million annually, a manageable expense relative to the substantial capital secured.

Investors should monitor the efficiency of capital deployment into wholesale IDC projects, as returns on these investments will ultimately determine whether this transaction creates shareholder value that offsets potential dilution. The company's disclosure about potential near-term share price pressure from convertible arbitrage strategies may create temporary volatility as notes investors establish hedging positions.

VNET's capital raise signals a strategic pivot toward expanding its wholesale data center footprint in China, a high-growth segment that typically involves long-term contracts with hyperscale cloud providers and large enterprises. This $430 million infusion provides VNET the necessary resources to compete effectively in China's capital-intensive data center market, where substantial ongoing investment is required to maintain technological relevance and scale.

The company's focus on wholesale IDC projects represents a market-aligned strategy. Wholesale data centers typically involve larger facilities with dedicated capacity for fewer customers, often resulting in more predictable revenue streams compared to retail colocation. This model requires significant upfront capital but can generate stable long-term returns through multi-year contracts with creditworthy customers.

China's data center market continues to experience substantial demand driven by cloud adoption, digital transformation initiatives, and data localization requirements. VNET's position as a leading carrier-neutral and cloud-neutral provider gives it competitive advantages in serving diverse customer needs across this ecosystem.

The success of this capital deployment will hinge on VNET's site selection, construction efficiency, power capacity acquisition, and ability to secure anchor tenants before or during construction. While the substantial capital infusion strengthens VNET's competitive positioning, execution risks remain in a market characterized by intense competition from both domestic and international data center operators expanding in China.

BEIJING, March 13, 2025 /PRNewswire/ -- VNET Group, Inc. (Nasdaq: VNET) ("VNET" or the "Company"), a leading carrier-neutral and cloud-neutral internet data center services provider in China, today announced the pricing of its offering (the "Notes Offering") of US$430 million in aggregate principal amount of 2.50% convertible senior notes due 2030 (the "Notes"). The Notes Offering is expected to close on or about March 17, 2023, subject to the satisfaction of customary closing conditions.

The Notes will bear interest at a rate of 2.50% per annum, payable semi-annually in arrears on April 1 and October 1 of each year, beginning on October 1, 2025. The Notes will be senior, unsecured obligations of the Company. The Notes will mature on April 1, 2030 unless earlier repurchased, redeemed or converted in accordance with the terms of the Notes prior to such date.

Holders of the Notes have the right to require the Company to repurchase all or part of their Notes in cash on April 3, 2028 or, subject to certain conditions, in the event of certain fundamental changes (as will be defined in the indenture of the Notes), at a repurchase price equal to 100% of the principal amount of the Notes to be repurchased, plus accrued and unpaid interest, if any, to, but excluding, the relevant repurchase date. In addition, on or after April 10, 2028, the Company may redeem all or part of the Notes for cash subject to certain conditions, at a redemption price equal to 100% of the principal amount of the Notes to be redeemed, plus accrued and unpaid interest, if any, to, but not including, the relevant optional redemption date. Furthermore, the Company may redeem all but not part of the Notes in the event of certain changes in the tax laws, at a redemption price equal to 100% of the principal amount of the Notes to be redeemed, plus accrued and unpaid interest, if any, to, but not including, the related redemption date.

Holders of the Notes may not convert the Notes at any time on or prior to the 40th day following the last date of the original issuance of the Notes (such date, the "Compliance Period End Date"). After the Compliance Period End Date and prior to the close of business on the business day immediately preceding October 1, 2029, the Notes will be convertible only if certain conditions are met. From and after October 1, 2029, holders of the Notes may convert their Notes at any time at their election until the close of business on the second scheduled trading day immediately preceding the maturity date. The Company will settle conversions by paying or delivering, as applicable, cash, the American Depositary Shares, each representing six Class A ordinary shares, with par value of US$0.00001 per share, of the Company (the "ADSs") or a combination of cash and ADSs, at the Company's election, subject to certain restrictions.

The Notes will initially be convertible at a conversion rate of 72.7273 ADSs per US$1,000 principal amount of Notes, which is equivalent to an initial conversion price of approximately US$13.75 per ADS and represents a conversion premium of approximately 25.0% above the Nasdaq closing price of the Company's ADSs on March 12, 2025, which was US$11.00 per ADS. The initial conversion rate is subject to adjustment upon the occurrence of certain events.

The Notes are offered in offshore transactions outside the United States to certain non-U.S. persons in compliance with Regulation S under the United States Securities Act of 1933, as amended (the "Securities Act"). The Notes, the ADSs deliverable upon conversion of the Notes (if any) and the Class A ordinary shares represented thereby have not been and will not be registered under the Securities Act or any other applicable securities laws, and may not be sold or otherwise transferred except under an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and in compliance with any other applicable securities laws. No public offering of the Notes, the ADSs deliverable upon conversion of the Notes (if any) and the Class A ordinary shares represented thereby is being made into the United States.

The Company intends to use the net proceeds from the Notes Offering for the capital investment in wholesale IDC projects, working capital and general corporate purposes.

The Company expects that potential investors in the Notes may employ a convertible arbitrage strategy to hedge their exposure in connection with the Notes. Any such activities by potential investors of the Notes following the pricing of the Notes Offering and prior to the maturity date could decrease (or reduce the size of any increase in) the market price of the ADSs and the trading price of the Notes. The effect, if any, of the activities described in this paragraph, including the direction or magnitude, on the market price of the ADSs or the trading price of the Notes will depend on a variety of factors, including market conditions, and cannot be ascertained at this time.

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. This press release contains information about the pending Notes Offering, and there can be no assurance that such transaction will be completed.

About VNET

VNET Group, Inc. is a leading carrier- and cloud-neutral internet data center services provider in China. VNET provides hosting and related services, including IDC services, cloud services, and business VPN services to improve the reliability, security, and speed of its customers' internet infrastructure. Customers may locate their servers and equipment in VNET's data centers and connect to China's internet backbone. VNET operates in more than 30 cities throughout China, servicing a diversified and loyal base of over 7,500 hosting and related enterprise customers that span numerous industries ranging from internet companies to government entities and blue-chip enterprises to small- to mid-sized enterprises.

Safe Harbor Statement

This announcement contains forward-looking statements. These forward-looking statements are made under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. These statements can be identified by terminology such as "will," "expects," "anticipates," "future," "intends," "plans," "target," "believes," "estimates" and similar statements. Among other things, quotations from management in this announcement as well as VNET's strategic and operational plans, contain forward-looking statements. VNET may also make written or oral forward-looking statements in its reports filed with, or furnished to, the U.S. Securities and Exchange Commission, in its annual reports to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Statements that are not historical facts, including statements about VNET's beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement, including but not limited to the following: VNET's goals and strategies; VNET's liquidity conditions; VNET's expansion plans; the expected growth of the data center services market; expectations regarding demand for, and market acceptance of, VNET's services; VNET's expectations regarding keeping and strengthening its relationships with customers; VNET's plans to invest in research and development to enhance its solution and service offerings; and general economic and business conditions in the regions where VNET provides solutions and services. Further information regarding these and other risks is included in VNET's reports filed with, or furnished to, the U.S. Securities and Exchange Commission. All information provided in this press release is as of the date of this press release, and VNET undertakes no duty to update such information, except as required under applicable law.

Investor Relations Contact:

Xinyuan Liu
Tel: +86 10 8456 2121
Email: ir@vnet.com 

 

Cision View original content:https://www.prnewswire.com/news-releases/vnet-prices-offering-of-us430-million-convertible-senior-notes-due-2030-302401036.html

SOURCE VNET Group, Inc.

FAQ

What are the key terms of VNET's US$430 million convertible notes offering?

2.50% interest rate, due 2030, convertible at 72.7273 ADSs per US$1,000, with initial conversion price of US$13.75 per ADS

When can holders convert VNET's 2030 convertible notes?

After the 40-day compliance period and before October 1, 2029 under certain conditions, and freely thereafter until maturity

What is the repurchase option for VNET's convertible notes?

Holders can require VNET to repurchase notes on April 3, 2028 at 100% of principal plus accrued interest

How will VNET use the proceeds from the convertible notes offering?

For capital investment in wholesale IDC projects, working capital, and general corporate purposes
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