China's Z.AI raises $5 billion from new share, convertible bond sales, filing shows

Beijing-based artificial intelligence company Z.AI Co Ltd raised a total of $5 billion from a Hong ​Kong share placement of about $2 billion and a concurrent convertible ‌bond sale of about $3 billion, the company said in a Hong Kong stock exchange filing on Sunday. Z.AI launched the sales on Friday, offering 21.97 million new ​Hong Kong shares at HK$714 ($91.05) each, a 10% discount to ​Friday's closing price of HK$793. The company also raised 20.14 billion ⁠yuan ($3 billion) of zero-coupon bonds due in September 2027, the ​filing showed. The yuan-denominated bonds will be settled in US dollars. The bonds ​were issued at 100.5% of their face value, the filing showed. The initial conversion price is HK$892.50, a 25% premium to the HK$714 share placement price. Z.AI can ​redeem all, but not part, of the bonds from February 18, ​2027, if its shares trade at or above 130% of the conversion price ‌for ⁠20 out of 30 trading days, according to the sheet. About 60% of the net proceeds will be used for research and development of the company’s next-generation models and its fully self-training system, Z.AI said in ​the filing. Another 15% ​of the proceeds ⁠will be for the company's expansion plans while the rest will be used to optimize its capital ​structure, replenish working capital for daily operations and for ​other ⁠general corporate purposes, according to the filing. The fundraising comes as Chinese AI developers seek capital for the costly computing infrastructure and talent needed to ⁠compete ​with larger U.S. rivals. Z.AI, formerly known as ​Zhipu AI, went public in Hong Kong in January and raised about $4 billion in a ​follow-on share sale in July.