Chinese budget lifestyle retailer Miniso Group Holding is securing $550 million through a debt instrument to support its global expansion and share repurchase initiatives, according to the South China Morning Post.
The Guangzhou-based company announced via a filing to the Hong Kong Stock Exchange on Tuesday that it will issue equity-linked securities maturing on January 14, 2032. These securities, offering a 0.5% annual interest rate paid semiannually, can be exchanged for cash after six years. The offering, which closes next Tuesday, is priced with an initial exercise rate of $8.28 (HK$64.39) per unit, representing a 26.1% premium over Monday’s closing price of HK$51.05. The securities are denominated in units of $200,000.
Richard Lin, chief consumer analyst at SPDB International, noted that the sophisticated structure of the instrument could lower Miniso’s financing costs and reduce expenses by approximately 4%. Lin also highlighted a growing trend of Chinese companies using overseas capital to fund international expansions.
Miniso intends to allocate approximately half of the $457 million net proceeds toward overseas expansion, supply chain improvements, and branding and promotional activities, with the remainder earmarked for share buybacks.
To mitigate dilution risks and manage excess cash payment obligations beyond the principal, Miniso has incorporated a call spread into the securities.
In recent years, Miniso has intensified its global expansion efforts, aiming to establish a network of 40,000 stores offering lifestyle goods and products tied to popular entertainment franchises. Last October, company executives identified the US and Europe as their next major markets, citing their higher per capita spending compared to China.
According to Miniso’s third-quarter report, the company added 773 stores in the first nine months of last year, raising its total store count to 7,186. Of these, 324 were added in China, bringing the domestic total to 4,250, while overseas stores increased by 449, reaching 2,936 locations globally.
