iQIYI Announces Closing of US$750 Million Convertible Senior Notes Offering
04 Dicembre 2018 - 10:30PM
iQIYI, Inc. (NASDAQ: IQ) (“iQIYI” or the “Company”), an innovative
market-leading online entertainment service in China, today
announced that it closed the offering (the “Notes Offering”) of
US$750 million in aggregate principal amount of convertible senior
notes due 2023 (the “Notes”), which included the exercise in full
by the initial purchasers of their option to purchase up to an
additional US$100 million aggregate principal amount of the Notes.
The Company received aggregate net proceeds of approximately
US$735.6 million after deducting discounts and commissions and
estimated offering expenses from the Notes Offering.
The Notes have been offered in the United States
to qualified institutional buyers pursuant to Rule 144A and to
non-U.S. persons outside the United States in reliance on
Regulation S under the Securities Act of 1933, as amended (the
“Securities Act”). The Notes, the ADSs deliverable upon conversion
of the Notes and the Class A ordinary shares represented thereby
have not been and will not be registered under the Securities Act
or the securities laws of any other place, and may not be offered
or sold in the United States absent registration or an applicable
exemption from registration requirements.
In connection with the Notes Offering, the
Company has entered into capped call transactions with one or more
of the initial purchasers and/or their respective affiliates and/or
other financial institutions (the “Option Counterparties”). The
capped call transactions are expected to reduce potential dilution
to existing holders of the ordinary shares and ADSs of the Company
upon conversion of the Notes and/or offset any potential cash
payments that the Company is required to make in excess of the
principal amount of any converted notes, as the case may be, with
such reduction and/or offset subject to a cap. As part of
establishing their initial hedges of the capped call transactions,
the Option Counterparties advised the Company that they and/or
their respective affiliates expect to trade the ADSs and/or enter
into various derivative transactions with respect to the Company’s
ADSs concurrently with, or shortly after, the pricing of the Notes.
This activity could increase (or reduce the size of any decrease
in) the market price of the ADSs or the Notes at that time.
In addition, the Option Counterparties or their
respective affiliates may modify their hedge positions by entering
into or unwinding various derivative transactions with respect to
the ADSs or other securities of the Company in secondary market
transactions following the pricing of the Notes and prior to the
maturity of the Notes. The Option Counterparties may engage in such
activity during any observation period relating to a conversion of
the Notes. This activity may also cause or avoid an increase or a
decrease in the market price of the ADSs or the Notes, which could
affect noteholders’ ability to convert the Notes and, to the extent
the activity occurs during any observation period related to a
conversion of the Notes, could affect the amount and value of the
consideration that noteholders will receive upon conversion of such
Notes.
The cap price of the capped call transactions is
initially US$38.42 per ADS, representing a premium of approximately
100% to the NASDAQ closing price of the Company’s ADSs on November
29, 2018, which was US$19.21 per ADS and is subject to adjustment
under the terms of the capped call transactions.
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.
About iQIYI, Inc.
iQIYI, Inc. is an innovative market-leading
online entertainment service in China. Its corporate DNA combines
creative talent with technology, fostering an environment for
continuous innovation and the production of blockbuster content.
iQIYI’s platform features highly popular original content, as well
as a comprehensive library of other professionally-produced
content, partner-generated content and user-generated content. The
Company distinguishes itself in the online entertainment industry
by its leading technology platform powered by advanced AI, big data
analytics and other core proprietary technologies. iQIYI attracts a
massive user base with tremendous user engagement, and has
developed a diversified monetization model including membership
services, online advertising services, content distribution, live
broadcasting, online games, IP licensing, online literature and
e-commerce etc.
Safe Harbor Statement
This announcement contains forward-looking
statements. These statements are made under the “safe harbor”
provisions of the U.S. Private Securities Litigation Reform Act of
1995. These forward-looking statements can be identified by
terminology such as “will,” “expects,” “anticipates,” “future,”
“intends,” “plans,” “believes,” “estimates,” “confident” and
similar statements. Among other things, the Financial Guidance and
quotations from management in this announcement, as well as iQIYI’s
strategic and operational plans, contain forward-looking
statements. iQIYI may also make written or oral forward-looking
statements in its periodic reports to the U.S. Securities and
Exchange Commission, in its annual report 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 but not limited to
statements about iQIYI’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: iQIYI’s strategies; iQIYI’s future business development,
financial condition and results of operations; iQIYI’s ability to
retain and increase the number of users, members and advertising
customers, and expand its service offerings; competition in the
online entertainment industry; changes in iQIYI’s revenues, costs
or expenditures; Chinese governmental policies and regulations
relating to the online entertainment industry, general economic and
business conditions globally and in China and assumptions
underlying or related to any of the foregoing. Further information
regarding these and other risks is included in the Company’s
filings with the Securities and Exchange Commission. All
information provided in this press release and in the attachments
is as of the date of the press release, and iQIYI undertakes no
duty to update such information, except as required under
applicable law.
For more information, please contact:
Investor Relations iQIYI, Inc. + 86 10 8264
6585ir@qiyi.com
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