Xiaomi seeks up to $4 billion in equity deals – term sheet

People are silhouetted in front of Xiaomi's logo at a venue in Beijing

Chinese smartphone maker Xiaomi Corp is aiming to raise up to $4 billion in an equity and convertible bond deal launched in Hong Kong on Tuesday, according to a term sheet seen by Reuters.

The company is selling 1 billion shares in a top-up transaction priced between HK$23.70 and HK$24.50, the term sheet showed.

The range is a 6.3% to 9.4% discount to Xiaomi’s closing price of HK$26.15 on Tuesday.

Xiaomi’s biggest shareholder, Smart Mobile Holdings Ltd, which owns about 27% of the company and is connected to chairman Lei Jun, according to the term sheet, is the selling Class B type shares.

A convertible bond deal to raise $855 million is also underway, according to the term sheet.

Final pricing of the share issuance will take place Tuesday following a global institutional bookbuild.

Xiaomi reported a 19% jump in third-quarter net profit on Nov. 24, as the Chinese smartphone maker’s shipments over the quarter surged by 45.3% from a year earlier.

The company said it had taken market share in China and Europe as its rival Huawei Technologies faced U.S. sanctions that have hit its supply chain.

Xiaomi did not immediately respond to a request for comment.

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