Baker McKenzie acted as the issuer's counsel to Kingsoft Corporation Limited ("Kingsoft") on its issuance of HKD 3.1 billion 0.625% convertible bonds due 2025. The transaction was completed on 29 April 2020.
Kingsoft is a company continued into the Cayman Islands, with limited liability and shares listed on the Stock Exchange of Hong Kong Limited (stock code: 3888). Kingsoft is a leading software application and internet services provider in China and is principally engaged in the research and development of games, as well as the provision of online games, mobile games and casual game services. It is also involved in the provision of cloud storage, cloud computation, design, research and development, and sales and marketing of the office software products and services of WPS Office.
The net proceeds from the bonds issuance are approximately HKD 3.034 billion. The net proceeds from the bonds are proposed to be used for general corporate purposes, for strategic investments and acquisitions, and, if appropriate, to supplement working capital. The initial conversion price was HKD 35.7637, representing a premium of approximately 27.5% over the closing price of Kingsoft's shares on the trading day on which the subscription agreement was signed.
The Baker McKenzie team was led by Partner Hang Wang in Beijing, with support from Yolanda Zheng, Counsel of FenXun Partners, the Chinese law firm that Baker McKenzie partnered with to establish the Baker McKenzie FenXun (FTZ) Joint Operation in the Shanghai FTZ. Other team members include Special Counsel Shanshan Xu and associate Daisy Chen from Baker McKenzie's Shanghai office, and associates Brian Ge from Baker McKenzie's Beijing office. In addition, Xavier Amadei, local principal of Baker McKenzie Wong & Leow in Singapore, also provided assistance to the team.
Commenting on the transaction, Hang Wang commented: "We are pleased to provide outstanding services to such a high-quality client as Kingsoft on an ongoing basis, and assist Kingsoft in relation to its convertible bonds issuance. The deal is the first equity-linked trade in Hong Kong since the coronavirus outbreak in January. Amidst the relatively soft market conditions, the bonds were well received by investors and managed to achieve pricing of the conversion price at a premium of approximately 27.5%. We are glad to see the market's confidence in the share price and prospects of Kingsoft. The bonds have provided Kingsoft with the capital needed for future strategic acquisitions and business development, and pave the way for the company's future expansion in the office software, games and cloud business.
Morgan Stanley and J.P. Morgan are the mangers in the issuance of convertible bonds of Kingsoft.