GDS Poised to Raise $1.67 Billion in Hong Kong Listing

Data center company GDS Holdings Ltd. has raised HK$12.9 billion ($1.67 billion) in its Hong Kong second listing, following in the steps of other U.S.-listed Chinese firms in seeking a trading foothold closer to home.

The Shanghai-based firm priced shares at HK$80.88 each, according to terms of the deal obtained by Bloomberg News. That represents a 3% discount to the closing price Monday of its Nasdaq-listed American depositary shares, at $86.04 apiece. One ADS represents 8 ordinary shares. GDS sold 160 million shares in its Hong Kong listing and had set a maximum price of HK$86 apiece.

GDS is part of a growing cohort of U.S.-listed Chinese firms looking to sell shares in Hong Kong to expand its investor base and as a hedge against any further deterioration in relations between Washington and Beijing. Tensions have spilled over into the capital markets, with the U.S. threatening to delist Chinese companies on the grounds American regulators don’t have access to their audit papers.

Over $13.5 billion has been raised this year through such second listings in Hong Kong, including the blockbuster deals of e-commerce giant JD.com Inc. and NetEase Inc., China’s second largest gaming company.

GDS plans to use the proceeds to expand its platform of high-performance data centers and to innovate and develop new technologies related to data center design, construction and operations. Its U.S. shares have risen 67% this year amid a surge in investor enthusiasm for cloud computing and data centers during the coronavirus pandemic.

JPMorgan Chase & Co., Bank of America Corp., China International Capital Corp. and Haitong International Securities Group Ltd. are joint sponsors of the proposed listing. Trading is set to begin on Nov. 2.

©2020 Bloomberg L.P.

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