The convertible preferred shares include the following key terms:
During the first six years from their issuance date, the convertible preferred shares accrue a minimum 3.75% p.a. dividend, payable quarterly in arrears, in cash or in kind in the form of additional convertible preferred shares, at the option of GDS. As of the sixth anniversary of the issuance date, the convertible preferred shares accrue a 6.75% p.a. minimum dividend, payable quarterly in arrears, in cash only, which dividend rate will further increase by 50 basis points per quarter thereafter for so long as any convertible preferred shares remain outstanding.
The convertible preferred shares will be convertible into GDS's Class A ordinary shares at the option of their holder, at a conversion rate corresponding to a conversion price of approximately US$54.43 per GDS's ADS (the "Conversion Price"), representing a premium of approximately 17.5% above its last closing price on January 30, 2026 in Hong Kong (as converted and divided by eight, being the ordinary-share-to-ADS ratio), or approximately 30.9% above the volume weighted average price for the 30 trading days immediately preceding the signing date, subject to customary anti-dilution adjustments, such as the issuance of ordinary shares as dividend or a subdivision or combination of ordinary shares.
Upon closing and prior to conversion, the holders of the convertible preferred shares are entitled to the number of votes per convertible preferred share equal to the number of Class A ordinary shares into which each such convertible preferred share is convertible into. Therefore, such holders of the convertible preferred shares will be able to vote on all matters at general meetings of our shareholders, voting together with the holders of ordinary shares as a single class.(1)
Upon exercise in full of the conversion rights attached to the convertible preferred shares at the Conversion Price, a total of approximately 5,512,072 ADSs (or 44,096,580 ordinary shares), representing 2.62% of total outstanding shares of the Company as at the date of this announcement will be issued, with an aggregate voting power of 2.70%, 1.79% and 1.17% on a 1:1, 1:20 and 1:50(2) ratio (between Class A ordinary shares and Class B ordinary shares), respectively.The dilutive impact of the issuance of the convertible preferred shares to the shareholdings of our substantial shareholders will be further disclosed at closing.
The convertible preferred shares will not be convertible at any time on or prior to March 31, 2027. From April 1, 2027 until September 30, 2031, if the last closing price for twenty of thirty days at the end of the calendar quarter is greater than 130% of the conversion price, the holder shall have the right to convert in the following calendar quarter.
GDS may redeem the convertible preferred shares at its election, beginning on February 13, 2029, provided certain conditions are met, including GDS's ADS trading price achieving a specified price threshold of 150% of the conversion price for at least twenty trading days in any period of thirty consecutive trading days.
The convertible preferred shares will not be redeemable before February 6, 2032, except in connection with certain trigger events as described above. On or after February 6, 2032, GDS may redeem all but not part of the convertible preferred shares at its option, at a redemption price per share equal to 100% of their face value, and including accrued and unpaid dividends.
The Holder of the convertible preferred shares have the option to require the Company to repurchase any convertible preferred shares held in the event of a fundamental change (as defined in the terms of the convertible preferred shares and including delisting or change or control), at a repurchase price per share equal to 100% of their face value, and ...
