GDS-SW (09698) has announced a private placement of $300 million in Series B convertible preferred shares to Huatai Capital Investment Limited, a Chinese institutional investor.

The proceeds from the private placement will be used by GDS to expand its data center capacity and for general corporate purposes.

These 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% from the sixth anniversary and rising by 50 basis points each quarter thereafter.

The conversion price is set at approximately $54.43 per GDS American Depositary Share, representing a 17.5% premium over the closing price in Hong Kong 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 a strengthened relationship with one of China's leading financial institutions, enables the company to further enhance Chinese nationals' "control" in terms of voting rights, and consequently allows the company to continue serving its major clients in mainland China.