In addition, the Capped Call Option Counterparties or their respective affiliates may modify their hedge positions by entering into or unwinding various derivative transactions with respect to the ADSs, the Notes or other securities of the Company and/or by purchasing or selling the ADSs, the Notes or other securities of the Company in secondary market transactions following the pricing of the Notes and prior to the maturity of the Notes (and are likely to do so following any conversion of the Notes, if the Company exercises the relevant election under the capped call transactions, or repurchase of the Notes by the Company). This activity could also cause or avoid an increase or a decrease in the market price of the ADSs or the price of the Notes, which could affect noteholders’ decision to convert the Notes and, to the extent the activity occurs around the time of any conversion of the Notes, could affect the amount and value of the consideration that noteholders will receive upon conversion of such Notes.
The cap price of the capped call transactions is initially US$14.92 per ADS, representing a premium of approximately 100% to the NYSE closing price of the Company’s ADSs on January 30, 2019, which was US$7.46 per ADS, and is subject to adjustment under the terms of the capped call transactions.
In connection with the pricing of the Notes, the Company has also entered into privately negotiatedzero-strike call option transactions with one or more of the initial purchasers or their respective affiliates (the “Zero-Strike Call Option Counterparties”) and intends to use a portion of the net proceeds of the Notes Offering to pay the aggregate premium under such transactions. Pursuant to thezero-strike call option transactions, the Company purchased in the aggregate, approximately 26.8 million ADSs, with delivery thereof (subject to adjustment) by the respective Zero-Strike Call Option Counterparties at settlement shortly after the scheduled maturity date of the Notes, subject to the ability of each Zero-Strike Call Option Counterparty to elect to settle all or a portion of the respectivezero-strike option transaction early.
As part of establishing their initial hedge of thezero-strike call option transactions, the Zero-Strike Call Option Counterparties or their respective affiliates expect to enter into one or more derivative transactions with respect to the ADSs with purchasers of the Notes concurrently with or after the pricing of the Notes. Thezero-strike call option transactions are intended to facilitate the hedging by the purchasers of the Notes of their investments by allowing such purchasers to establish short positions that generally correspond to commercially reasonable initial hedges of their investments in the Notes. Facilitating investors’ hedge positions by entering into thezero-strike call option transactions, particularly if investors purchase the ADSs on or around the day of the pricing of the Notes, could increase (or reduce the size of any decrease in) the market price of the ADSs and effectively raise the conversion price of the Notes. If anyzero-strike call option transaction fails to become effective, whether or not the Notes Offering is completed, the respective Zero-Strike Call Option Counterparties may unwind their hedge positions with respect to the ADSs, which could adversely affect the market price of the ADSs and, if the Notes have been issued, the value of the Notes.
In addition, the Zero-Strike Call Option Counterparties or their respective affiliates may modify their respective hedge positions by entering into or unwinding one or more derivative transactions with respect to the ADSs, the Notes or other securities of the Company and/or by purchasing or selling ADSs, the Notes or other securities of the Company in secondary market transactions at any time, including following the pricing of the Notes and prior to the maturity of the Notes. This activity could also cause or avoid an increase or a decrease in the market price of the ADSs or the price of the Notes, which could affect noteholders’ decision to convert the Notes and, to the extent the activity occurs around the time of any conversion of the Notes, could affect the value of the consideration that noteholders will receive upon conversion of such Notes.
The Company expects to close the Notes Offering on or about February 4, 2019, subject to the satisfaction of customary closing conditions.
This press release shall not constitute an offer to sell or a solicitation of an offer to purchase any securities, nor shall there be a sale of the securities in any state or jurisdiction in which such an offer, solicitation or sale would be unlawful.
This press release contains information about the pending offerings of the Notes, the capped call transactions andzero-strike call option transactions, and there can be no assurance that any of the offerings, the capped call transactions andzero-strike call option transactions will be completed.
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