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

Rhea-AI Summary

JOYY Inc. announces the notification to holders of its 1.375% Convertible Senior Notes due 2026 regarding the Repurchase Right. Holders have the option to require the Company to repurchase their notes for cash on June 15, 2024. The Repurchase Right becomes exercisable on May 10, 2024, and expires on June 13, 2024. The Company will file a Tender Offer Statement on Schedule TO today. The repurchase price is equal to 100% of the principal amount of the notes plus any accrued and unpaid interest. As of April 11, 2024, there was US$406,038,000 in aggregate principal amount of the notes outstanding.

Insights

Financial Analyst

The announcement by JOYY Inc. regarding the repurchase option for its 1.375% Convertible Senior Notes due 2026 presents a significant event for bondholders and investors. This repurchase right, often included in bond indentures, allows investors to sell their notes back to the issuer at a predetermined price. In this case, the repurchase price is set at 100% of the principal amount, plus any accrued interest. This move could indicate a strategic financial decision by JOYY to manage its debt liabilities, potentially impacting the company's cash reserves.

From a financial analysis perspective, the exercise of this option by note holders could lead to a cash outflow from the company's balance sheet amounting to US$406,038,000, assuming all note holders opt to exercise the repurchase right. This could affect the company's liquidity and financial flexibility in the short term. Investors should monitor the company's cash position and any changes in its debt profile following this event. Additionally, the terms of the repurchase could reflect the company's creditworthiness and market conditions, as the repurchase price aligns with the face value of the notes, which may be viewed as a neutral signal in terms of the company's financial health.

Debt Market Analyst

Convertible notes are hybrid financial instruments that contain both debt and equity features. They offer investors the ability to convert the debt into a predetermined number of shares of the issuing company, typically at a conversion rate set at the time of issuance. The option to repurchase these notes often serves as a safety net for investors, especially if the underlying stock has not performed as expected or if market conditions have deteriorated.

In the case of JOYY Inc., the decision to exercise the repurchase right could be influenced by the current market price of JOYY's shares relative to the conversion rate. If the stock price is below the conversion threshold, note holders might be more inclined to opt for the repurchase to realize immediate value. Conversely, if JOYY's stock is performing well, investors may prefer conversion to equity, aiming for potential capital gains. Market participants should evaluate the intrinsic value of the convertible notes, taking into account the volatility of the underlying stock, interest rate environment and the company's potential growth prospects.

Corporate Governance Expert

The press release emphasizes that neither the company nor its board of directors is making any recommendation to the note holders regarding the exercise of the repurchase right. This stance underscores the importance of corporate governance in ensuring that all stakeholders have the information and independence to make their own financial decisions. It also reflects a commitment to transparency and fair dealing, as required by the SEC and other regulatory bodies.

Investors should appreciate that the company is providing all the necessary documentation and adhering to the legal framework outlined in the indenture. This approach minimizes potential conflicts of interest and promotes an equitable process for all parties involved. Stakeholders might also consider the broader implications of such corporate actions on investor confidence and the company's reputation in the capital markets.

SINGAPORE, April 12, 2024 (GLOBE NEWSWIRE) -- JOYY Inc. (Nasdaq: YY) (“JOYY” or the “Company”), a global technology company, today announced that it is notifying holders of its 1.375% Convertible Senior Notes due 2026 (CUSIP No. 98426T AF3) (the “2026 Notes”) that pursuant to the Indenture dated as of June 24, 2019 (the “Indenture”) relating to the 2026 Notes by and between the Company and Citicorp International Limited, as trustee, each holder has the right, at the option of such holder, to require the Company to repurchase for cash on June 15, 2024 all of such holder’s 2026 Notes or any portion thereof that is an integral multiple of US$1,000 principal amount (the “Repurchase Right”). The Repurchase Right becomes exercisable at 9:00 a.m., New York City time, on Friday, May 10, 2024 and expires at 5:00 p.m., New York City time, on Thursday, June 13, 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 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 2026 Notes to require the Company to repurchase for cash on June 15, 2024 (the “Repurchase Date”), all of such holder’s 2026 Notes, or any portion thereof that is an integral multiple of US$1,000 principal amount, at a repurchase price that is equal to 100% of the principal amount of the 2026 Notes to be repurchased, plus any accrued and unpaid interest to, but excluding, the Repurchase Date, subject to the terms and conditions of the Indenture and the 2026 Notes. The Repurchase Date is an interest payment date under the terms of the Indenture and the 2026 Notes. Accordingly, on June 15, 2024, being the interest payment date, the Company will pay accrued and unpaid interest on all of the 2026 Notes through June 14, 2024, to all holders who are holders of record on June 1, 2024, regardless of whether the Repurchase Right is exercised with respect to such 2026 Notes. On the Repurchase Date, there will be no accrued and unpaid interest on the 2026 Notes. As June 15, 2024 is a Saturday, the Company will pay the repurchase price for the 2026 Notes tendered and the accrued interest on all of the 2026 Notes on Monday, June 17, 2024, the next succeeding business day following the Repurchase Date, pursuant to the Indenture. As of April 11, 2024, there was US$406,038,000 in aggregate principal amount of the 2026 Notes outstanding. If all outstanding 2026 Notes are surrendered for repurchase through exercise of the Repurchase Right, the aggregate cash repurchase price will be US$406,038,000.

The opportunity for holders of the 2026 Notes to exercise the Repurchase Right commences at 9:00 a.m., New York City time, on Friday, May 10, 2024, and will expire at 5:00 p.m., New York City time, on Thursday, June 13, 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 2026 Notes pursuant to the terms of the Repurchase Right at any time prior to 5:00 p.m., New York City time, on Thursday, June 13, 2024, which is the second business day immediately preceding the 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 2026 Notes or any other securities of the Company. The offer to purchase the 2026 Notes will be only pursuant to, and the 2026 Notes may be tendered only in accordance with, the Company’s Repurchase Right Notice dated April 12, 2024 and related documents.

Holders of the 2026 Notes should refer to the Indenture for a complete description of repurchase procedures. Holders of the 2026 Notes may request the Company’s Repurchase Right Notice from the paying agent, at Citibank, N.A., 480 Washington Boulevard, 30th floor, Jersey City, NJ 07310, Attention: Agency and Trust.

HOLDERS OF THE 2026 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 JOYY 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.joyy.com/.

About JOYY Inc.

JOYY is a leading global technology company with a mission to enrich lives through technology. JOYY currently operates several social products, including Bigo Live for live streaming, Likee for short-form videos, Hago for multiplayer social networking, an instant messaging product, and others. The Company has created a highly engaging and vibrant user community for users across the globe. JOYY’s ADSs have been listed on the NASDAQ since November 2012.

Investor Relations Contact

JOYY Inc.
Jane Xie/Maggie Yan
Email: joyy-ir@joyy.com

ICR, Inc.
Robin Yang
Email: joyy@icrinc.com 

FAQ

When does the Repurchase Right become exercisable for JOYY Inc. (YY) holders?

The Repurchase Right becomes exercisable at 9:00 a.m., New York City time, on Friday, May 10, 2024.

What is the repurchase price for JOYY Inc.'s (YY) 2026 Notes?

The repurchase price is equal to 100% of the principal amount of the 2026 Notes to be repurchased, plus any accrued and unpaid interest.

How much was the aggregate principal amount of the 2026 Notes outstanding as of April 11, 2024?

As of April 11, 2024, there was US$406,038,000 in aggregate principal amount of the 2026 Notes outstanding.

Where can holders find the Repurchase Right Notice for JOYY Inc.'s (YY) 2026 Notes?

Holders may request the Company’s Repurchase Right Notice from the paying agent, at Citibank, N.A., 480 Washington Boulevard, 30th floor, Jersey City, NJ 07310, Attention: Agency and Trust.

What should holders do to exercise the Repurchase Right for JOYY Inc.'s (YY) 2026 Notes?

In order to exercise the Repurchase Right, a holder must follow the transmittal procedures set forth in the Company’s Repurchase Right Notice.