Miniso issues US$550 million of debt for global expansion, share buy-backs

Chinese budget lifestyle goods retailer Miniso Group Holding is raising US$550 million from a debt instrument to fund its overseas expansion efforts and for share buy-backs.

The Guangzhou-based company will issue the amount in equity-linked securities, maturing on January 14, 2032, according to a filing to the Hong Kong stock exchange on Tuesday. The securities, which can be exchanged for cash after six years, carry a 0.5 per cent interest rate, payable semiannually. The offer closes next Tuesday.

The initial exercise price for the instrument is US$8.28 (equivalent to HK$64.39), a premium of 26.1 per cent over the closing price of HK$51.05 on Monday. The equity- linked securities will be denominated in units of US$200,000.

“The complex instrument could reduce Miniso’s financing costs and help the company cut expenses by around 4 per cent,” said Richard Lin, chief consumer analyst at SPDB International. “As more Chinese companies look to expand internationally, they will increasingly rely on financing from overseas capital.”

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Lin said he expects to see more companies issue debt with more intricate structures.

Miniso shares fell as much as 8.3 per cent before paring losses to trade at HK$48.45 at 3.08pm.