BEIJING, March 1,
2023 /PRNewswire/ --
iQIYI, Inc. (Nasdaq: IQ) ("iQIYI" or the
"Company"), a leading provider of online entertainment video
services in China, today announced the pricing of its
offering (the "Notes Offering") of US$600 million
in aggregate principal amount of 6.50% convertible
senior notes due 2028 (the "Notes"). The Notes will bear
interest at a rate of 6.50% per year, payable quarterly
in arrears on March 15, June 15,
September 15 and December 15 of each year, beginning
on June 15, 2023. The Notes will mature on March 15,
2028, unless repurchased, redeemed or converted in accordance with
the terms of the Notes prior to such date.
The Notes will rank effectively junior to any of the Company's
secured indebtedness (including certain Company's obligations
related to the outstanding convertible notes due 2028) to the
extent of the value of the assets securing such indebtedness.
Holders of the Notes may not convert the Notes at any time on or
prior to the 40th day following the last date of original issuance
of the Notes (such date, the "Compliance Period End Date"). After
the Compliance Period End Date and prior to the close of business
on the business day immediately preceding September 15, 2027,
the Notes will be convertible only if certain conditions are met.
On or after September 15,
2027 until the close of business on the second scheduled
trading day immediately preceding the maturity date, the Notes
will be convertible at any time. Upon conversion, holders will
receive cash, the American Depositary Shares, each representing
seven Class A ordinary shares, with par value of $0.00001 per share, of the Company (the
"ADSs") or a combination of cash and ADSs, at the election of the
Company. The Notes will initially be convertible at a
conversion rate of 101.4636 ADSs
per US$1,000 principal amount of Notes, which is
equivalent to an initial conversion price of
approximately US$9.86 per ADS and represents a conversion
premium of approximately 27.5% above the Nasdaq closing price of
the Company's ADSs on February 28,
2023, which was US$7.73 per
ADS). The initial conversion rate is subject to adjustment upon the
occurrence of certain events. On
March 16, 2026 or in the event of certain fundamental
changes, the holders of the Notes will have the right to
require the Company to repurchase for cash all or part of their
Notes at a repurchase price equal to 100% of the principal amount
of the Notes to be repurchased, plus accrued and unpaid interest
to, but excluding, the repurchase date. The Notes Offering is
expected to close on or about March 7,
2023, subject to the satisfaction of customary closing
conditions.
The Notes are offered in offshore transactions outside
the United States to certain
non-U.S. persons in compliance with Regulation S under the United
States Securities Act of 1933, as amended (the "Securities Act").
The Notes, the ADSs deliverable upon conversion of the Notes (if
any) and the Class A ordinary shares represented thereby have
not been and will not be registered under the Securities Act or any
other applicable securities laws, and may not be sold or otherwise
transferred except under an exemption from, or in a transaction not
subject to, the registration requirements of the Securities Act and
in compliance with any other applicable securities laws. No public
offering of the Notes, the ADSs deliverable upon conversion of the
Notes (if any) and the Class A ordinary shares represented thereby
is being made into the United
States.
The Company intends to use the net proceeds from the Notes
Offering for repayment and/or
repurchase of the existing debt securities.
Shortly after the pricing of the Notes, the Company entered into
one or more separate and individually privately negotiated
agreements with certain holders of the Company's 4% convertible
senior notes due 2026 (the "Existing Notes") to repurchase
approximately US$245 million
principal amount of the Existing Notes for cash (each, a
"Repurchase Transaction"). The terms of each Repurchase transaction
have been individually negotiated with each holder of the Existing
Notes.
Holders of the Existing Notes that agreed to sell their Existing
Notes in such Repurchase Transactions (in particular, holders that
employ a convertible arbitrage strategy with respect to the
Existing Notes) may purchase the Company's ADSs in the market
and/or in privately negotiated transactions and/or enter into or
unwind economically equivalent derivative transactions, with
respect to the Company's ADSs to hedge their exposure in connection
with these Repurchase Transactions and their investment in the
Existing Notes. In addition, certain purchasers of the Notes may
establish a short position with respect to its ADSs by short
selling the Company's ADSs or by entering into short derivative
positions with respect to the Company's ADSs, in each case, in
connection with the Notes Offering. Any of the above market
activities could affect the market price of the Company's ADSs or
the trading price of the Notes or other outstanding debt securities
of the Company. The consummation of the Repurchase Transactions
will be conditional on the completion of the Notes Offering.
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. This
press release contains information about the pending Notes Offering
and the repurchase of the Existing Notes, and there can be no
assurance that either of such transactions will be completed.
About iQIYI, Inc.
iQIYI, Inc. is a leading provider of online entertainment
video services in China. It combines creative talent with
technology to foster an environment for continuous innovation and
the production of blockbuster content. It produces, aggregates and
distributes a wide variety of professionally produced content, as
well as a broad spectrum of other video content in a variety of
formats. 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 daily subscriber base of more than
100 million, and its diversified monetization model includes
membership services, online advertising services, content
distribution, online games, IP licensing, talent agency, online
literature, 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 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 or whether any of the
transactions referred to herein will be completed and the terms on
which it will be completed. 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.
ir@qiyi.com
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SOURCE iQIYI, Inc.