The Chinese operator GDS has secured $587 million of funding for GDS International (GDSI), its holding company for international operations.
GDS this week announced it has entered into definitive agreements for certain institutional private equity investors to subscribe for $587 million of Series A convertible preferred shares newly issued by GDSI.
The company said the transaction was a “significant step forward” to obtain dedicated financing for the development of GDS’ international business on a standalone basis.
GDS confirmed it was selling a stake in its international operations earlier this year. The fundraising values GDS’ international business at $750 million.
As of the end of 2023, GDS has provided $595 million of inter-company funding to GDSI, comprising approximately $411 million of paid-up share capital and $184 million of shareholder loans and other payables. GDS International says it will not require further inter-company funding and will be sufficiently capitalized to complete the development of its current portfolio.
At the close of the most recent deal, GDS will own approximately 56.1 percent of the equity interest of GDS International. The remaining 43.9 percent will be held by the investors including Hillhouse, Rava Partners, Boyu, Princeville Capital, and Tekne Capital.
William Huang, chairman and CEO of GDS, said: “I am delighted to announce this landmark capital raising which is a big step forward in our strategy to obtain dedicated financing for the development of our international business on a standalone basis.”
He added: “This equity issue benchmarks the significant value which we have created for our shareholders.”
Earlier this week, GDS announced the appointment of Jamie Khoo as CEO of GDS International.
GDS was founded in 2006 and operates dozens of data centers across Greater China, including in Suzhou Kunshan, Chengdu, Shanghai, Shenzhen, and Beijing.
Its international unit, GDS International, was established in 2022 and currently operates in Hong Kong, Singapore, Malaysia, and Indonesia. The company says its portfolio comprises 330MW of data center capacity in service and under construction and a further 340MW held for future development.
GDSI’s financial and legal advisors for this transaction were Morgan Stanley Asia Limited and White & Case, respectively.
