China’s WuXi AppTec will raise $500 million in a convertible bond sale, according to a regulatory filing on Tuesday, a month after the U.S. passed rules to restrict business with the firm on national security grounds.
Wuxi Apptec said the proceeds raised in the deal would be used to fund the Shanghai-headquartered biotech company’s global expansion and debt refinancing, according to its stock exchange announcement.
The zero-coupon bonds are due to mature in October 2025 have an initial conversion price of HK$80.02 per Hong Kong share. The conversation rate is a near 16% premium to the stock’s closing price on Monday.
Wuxi Apptec works on the discovery, development and production of small molecule drugs, cell therapies and gene therapies, as well as providing testing services for medical devices.
The company, along with other Chinese firms, have been at the centre of new U.S. laws aimed at restricting their businesses in the United States due to national security concerns.
The U.S. House of Representatives passed the Biosecure Act in September that would prohibit federal contracts with targeted firms and those that do business with them.
The bills are designed to keep Americans’ personal health and genetic information from foreign adversaries and aim to push U.S. pharmaceutical and biotech companies to lessen their reliance on China for everything from drug ingredient manufacturing to early research.
The legislation must pass the U.S. Senate before it can be sent to President Joe Biden to be signed into law. China’s foreign ministry has described the U.S bill as ‘discriminatory’.
Wuxi Apptec’s Hong Kong listed shares are down nearly 14% year to date while its Shanghai-listed stock is off 28%.
Reuters