Chinese data center firm GDS has raised $620 million via convertible notes.

GDS Holdings Limited this week announced that it has entered into agreements to sell $620 million in convertible senior notes to Sequoia China Infrastructure Fund I (SCIF), ST Telemedia Global Data Centres (STT GDC), and an Asian sovereign wealth fund that "has a strategic relationship with GDS."


The company said it intends to use the net proceeds from the placement of the notes for the development and acquisition of new data centers, general corporate purposes, and working capital needs.

As well as the investment, GDS and Sequoia China have entered into a strategic cooperation agreement to identify and pursue “collaborative opportunities for business synergies.” The two companies will look to explore the development and implementation of GDS’s regionalization strategy as well as acquisitions and investments in data center businesses in China and overseas.

“I am very pleased to secure this capital to support our business growth,” said William Huang, Chairman and CEO of GDS. “Furthermore, I am very pleased to have done it in a way which adds value to GDS and strengthens our investor base. We welcome Sequoia China, a renowned name in the investment community, as our new investor and look forward to working with them to seek further business opportunities and synergies. We also very much appreciate the ongoing support from our longstanding strategic shareholder and partner, STT GDC.”

The transaction is expected to close on or about March 8. J.P. Morgan acted as sole placement agent to GDS in connection with the private placement.

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