GDS (HKG:9698) said it agreed to a private placement of $300 million of Series B convertible preferred shares to Huatai Capital Investment to fund data center capacity expansion and for general corporate purposes, according to a Jan. 30 Hong Kong bourse filing.

Shares of the firm were down nearly 7% in Monday's midday trade.

The preferred shares carry a minimum dividend of 3.75% per year for the first six years, payable quarterly in cash or in kind at the company's option.

The rate steps up to 6.75% after the sixth year and increases by 50 basis points per quarter thereafter if outstanding.

The shares are convertible at $54.43 per ADS, representing a premium of roughly 17.5% to the last close, the filing said.