GDS Holdings Prices Offering of 12 Million Additional ADSs

Today’s announcement came two days after the Shanghai-based company said it would seek to raise $400 million through an offering of additional ADSs.

Author: Peter H. Frank   

GDS Holdings Ltd. (Nasdaq: GDS) announced today the pricing of its previously announced planned offering of 12 million American depositary shares at $33.50 per share. 

Today's announcement came two days after the Shanghai-based company, a top operator of data centers in China, said it would seek to raise $400 million through an offering of additional ADSs to fund "the development and acquisition of new data centers" and for general corporate purposes. 

The underwriters, led by J.P. Morgan Securities, Morgan Stanley & Co, and RBC Capital Markets, have an option to purchase an additional $60 million of shares. 

The earlier announcement also coincided with the company's fourth quarter report showing revenue jumped 64 percent year-over-year to $120.6 million in the three months through December. Its net loss, however, widened to $17.9 million, 5 percent more than reported for the same period of 2017. Loss per share was 2 cents. 

After the announcements, GDS shares fell nearly 5 percent to the $33.50 level at which the offering was priced today. 

Shares in GDS closed today in New York at $35.88 per share, up 30 cents on the day. 

The announcements earlier this week of the planned offering also came the same day that the company said that China Ping An Insurance Overseas (Holdings) Ltd., a unit of the giant Ping An insurance group, would be making a $150 million equity investment through the purchase of convertible preferred shares. 

"We are delighted to strengthen our strategic relationship with Ping An through this investment," said William Huang, chairman and chief executive officer of GDS. "We see great potential to work with Ping An in growing its market-leading technology platforms and ecosystems in key verticals such as fintech, healthcare, auto-services, real estate, and smart cities." 

GDS said the preferred shares will carry an interest rate of 5 percent for the first eight years, before climbing to 7 percent. The shares are convertible to Class A ordinary shares at a price equal to $35.60 per ADS at the discretion of the holder.