IQiyi, a China-based video streaming service, has closed a private placement of US$500 million in secured convertible senior notes to a subsidiary of Asia Pacific-focused alternative investment firm PAG.
Photo credit: Solomon203 / Wikimedia Commons
Founded in 2010, iQiyi is a Baidu-backed streaming platform focused on long-form videos. The so-called “Netflix of China” fights head-to-head with other local offerings, including Youku Tudou and Tencent Video – which are backed by Alibaba and Tencent, respectively.
In a statement, iQiyi said the notes will be convertible into its American depositary shares. The notes have an interest rate of 6% and will mature five years after the issuance date.
“We will work with the company to further its goals of expanding the region’s leading online entertainment video service,” said Weijian Shan, executive chair of PAG. Shan was also appointed to the board of iQiyi as a non-voting member of the audit committee and a member of the compensation committee.
See also: Behind iQiyi’s long, painful road to profitability
The development follows iQiyi and Douyin – the Chinese version of ByteDance’s TikTok – forging a partnership that would allow clips from the former’s shows to be uploaded as short-form videos on the latter’s platform.
IQiyi also reported US$43.5 million in operating income for the third quarter of 2022. Total revenue slid 2% to US$1.1 billion for the quarter, while net loss narrowed more than 4x to US$55.6 million compared to the same year-ago quarter.
Editing by Lorenzo Kyle Subido
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