Beijing artificial intelligence company Z.AI Co Ltd has raised a total of $5 billion from a share offering in Hong Kong worth about $2 billion and a simultaneous sale of convertible bonds worth about $3 billion, the company said in a report to the Hong Kong Stock Exchange on Sunday.
Z.AI began selling on Friday, offering 21.97 million new Hong Kong shares at HK$714 ($91.05) each, representing a 10 percent discount to Friday’s closing price of HK$793.
The company also raised 20.14 billion yuan ($3 billion) through zero coupon bonds due September 2027, the filing said. Bonds denominated in RMB will be settled in US dollars.
As follows from the documentation, the bonds were issued at a price of 100.5% of their face value. The initial conversion price is HK$892.50, representing a 25 per cent premium to the share issue price of HK$714.
According to the statement, Z.AI can repurchase all, but not part, of the bonds from February 18, 2027 if its shares trade at or above 130 percent of the conversion price for 20 out of 30 trading days.
About 60 percent of net proceeds will be used for research and development of the company’s next-generation models and its fully self-learning system, Z.AI said in a statement.
Another 15 percent of the proceeds will be used for the company’s expansion plans, while the rest will be used to optimize its capital structure, replenish working capital for daily operations and other general corporate purposes, the statement said.
The fundraising comes as Chinese artificial intelligence developers seek capital for the expensive computing infrastructure and talent needed to compete with larger U.S. rivals.
Z.AI, formerly known as Zhipu AI, went public in Hong Kong in January and raised about $4 billion in a subsequent share sale in July.