Bilibili-W (09626) plans to sell US$700 million convertible senior notes and Tencent to subscribe for US$200 million notes

According to Zhitong Finance App News, Bilibili-W (09626) announced that the company plans to sell convertible senior notes with a total principal amount of US$700 million due in 2031; the sale of these notes includes Tencent (through its subsidiary) subscribing to notes with a total principal amount of US$200 million under the same terms as other investors; second-tier placement of Class Z common shares, including Tencent (through its subsidiaries) holding approximately US$400 million of existing Class Z common shares and certain shares borrowed from unaffiliated third parties, simultaneously submitting and selling the same documents to investors in the same category. The filing procedure is carried out;

Also, the Company's repurchase of approximately $100 million of borrowed shares to mitigate the potential dilution effects of note conversion, and $200 million of existing Class Z common shares held by Tencent (through its subsidiaries) were carried out at the liquidation price of the above level 2 placement in each case.

The Company plans to use the total proceeds from the bill sale in the following ways to fund simultaneous hedging buybacks; fund simultaneous Tencent repurchases; use AI-driven business growth, including but not limited to: enhancing its AI capabilities in understanding, recommending and creating content; deepening user engagement through its high-quality content and community; and using AI to enhance productivity and efficiency; and use AI for general corporate purposes.

On September 4, 2026, the Company and Tencent signed a note subscription and share repurchase agreement (Tencent subscription and share repurchase agreement) on Tencent note subscription matters and simultaneous Tencent repurchase. The agreement came into effect when the Company or on behalf of the Company issued a press release announcing the commencement of the proposed market-based bill sale.

According to the terms of the Tencent Subscription and Repurchase Agreement and subject to its terms and conditions, Huang River agreed to subscribe and purchase from the Company upon completion of the transaction, and the Company agreed to issue, sell and deliver notes with a total principal amount of US$200 million to Huang River without any property liability (except for the transfer restrictions contained in the bill clauses drawn up in the Pricing Clause List and transfer restrictions that may be stipulated by applicable securities laws). The subscription price is equal to 100% of the total principal amount of US$200 million.

In accordance with the terms of Tencent's subscription and repurchase agreement and subject to its terms and conditions, upon completion of the transaction, Huang River agreed to sell to the Company and the Company agreed to purchase 10,954,357 American Depositary Shares (Huang River sold American Depositary Shares) held by Huang River; and Tencent Mobility agreed to sell to the Company and the Company agreed to purchase the relevant number of Class Z common shares (including representing Z) from Tencent Mobility American Depositary Shares (shares sold by Tencent Mobility) (shares sold by Tencent Mobility). This amount is equal to the quotient obtained by dividing US$200 million (total repurchase price) by the dollar equivalent of the reference price (and this quotient has been rounded to the nearest whole number), minus the number of Class Z common shares represented by Huang River's sale of American Depositary Shares. The sale of shares will not be subject to any property liability upon delivery (except that any “restricted securities” status under section 144 of the Securities Act shall not be considered a burden of property rights), fully paid shares (in the case of Class Z common shares), and all rights attached or accrued upon completion of the transaction and thereafter.

In view of the current positive performance of the capital market linked to equity, the company is considering seizing the current environmental advantages to raise capital on favorable terms through bill sales. In addition to using the total amount of proceeds from the sale of the notes to disburse funds for simultaneous repurchases, the Company plans to use the remaining proceeds for AI-driven business growth, including but not limited to: enhancing its AI capabilities in understanding, recommending and creating content; deepening user engagement through its high-quality content and community; and using AI to improve productivity and efficiency; and general corporate use. Tencent's subscription notes also show that Tencent continues to have full confidence in the company's long-term prospects.