GDS-SW (09698) announced a private placement of $300 million in Series B convertible preferred shares to a Chinese institutional investor, Huatai Capital Investment Limited. GDS intends to use the net proceeds from the private placement to expand its data center capacity and for general corporate purposes.

The convertible preferred shares will carry a cumulative annual dividend of no less than 3.75% for the first six years, with the minimum dividend rate increasing to 6.75% starting from the sixth anniversary and then rising by 50 basis points each quarter. The conversion price is set at approximately $54.43 per GDS American Depositary Share, representing a 17.5% premium to the Hong Kong closing price on January 30, 2026.

The Board of Directors believes the private placement is in the overall interests of the company and its shareholders, as it demonstrates the strengthening of the relationship with one of China's leading financial institutions. This move enables the company to further enhance "control" by Chinese nationals in terms of voting rights, thereby allowing the company to continue serving its major clients in mainland China.