Z.AI sets about $5 billion Hong Kong share placement and convertible bond sale

The filing says Z.AI agreed on September 12 to place up to 21,965,000 new H shares at HK$714 each, about 10 percent below the previous close of HK$793, for gross proceeds of roughly HK$15.7 billion. Separately it agreed to issue 20.14 billion yuan of U.S. dollar-settled zero-coupon convertible bonds maturing on September 16, 2027, priced at 100.5 percent of face value, for gross proceeds of about $3.02 billion. The initial conversion price is HK$892.50, about 12.6 percent above the last close. The two deals are not conditional on each other, and both were still subject to closing conditions.

Z.AI said about 60 percent of net proceeds will fund research on its next-generation GLM foundation models and training and inference computing infrastructure, 15 percent will go to business expansion, strategic investments and possible acquisitions, and 25 percent to capital structure and working capital. Hong Kong units of CICC and Guotai Junan Securities are handling both transactions. The company listed in Hong Kong in January and raised net proceeds of about HK$31.4 billion in a July placement priced at HK$1,588 a share, according to the filing.