SouFun Holdings Limited has entered into an agreement to raise between $400 million and $700 million from IDG Capital Partners, the Carlyle Group the management (mainly founder and CEO Vincent Mo). The new investors will purchase SouFun's newly issued Class A ordinary shares and convertible notes.
Under the agreements, the subscription price of the new Class A ordinary shares is US$5.85 per current ADS (i.e. US$29.25 per Class A ordinary share), which is higher than the closing price of SouFun's ADS as of September 16, 2015 and represents a 3.5% premium to the volume-weighted average trading price of the ADS for the 20 trading days preceding September 16, 2015.
Holders of the convertible notes will have the right to convert the Notes into Class A ordinary shares at the price per share equal to 122.5% of the per share purchase price of the new Class A ordinary shares in 7 years after the issuance of the Notes. The Notes shall bear an annual interest of 1.5%.
"IDG and Carlyle's financial commitment to Fang.com shows their confidence in Fang.com's management," said Vincent Mo, Chairman and CEO of Fang.com. "With the new investment, the company will be in a better position to strengthen its transformation. The company will expand aggressively to more cities and rapidly increase its market share in existing cities with its new transaction and financial service business lines."