Uxin, a used car dealer based out of China, is preparing to receive around new funds less than a year after raising $225 million from their initial public offer.
The company announced on Wednesday that it’s selling $230 million worth of convertible notes to 58.com — China’s answer to Craigslist, Warburg Pincus, TPG and other investors. The fresh proceeds will go toward strengthening its cross-regional car transactions, a new area of focus for the firm.
The notes, due in June, convert to Uxin’s Class A ordinary shares at a price of $1.03 per share or $3.09 per ADS. Upon closing the deal, each of 58.com, Warburg Pincus and TPG will obtain the right to nominate one board director to Uxin.
Uxin was trading at $2.46 at the end of Tuesday, a 74% decline from its recent peak in January. Its stock tanked in April after short-seller J Capital Research broadsided it over alleged frauds. Uxin denied the accusations, saying they were “false and misleading.”
58.com made the investment only a few months after offering to sell an undisclosed amount of its stakes in Chehaoduo, which was formerly known as Guazi, for a total of $713.6 million. Chehaoduo is one of Uxin’s closest rivals and is backed by deep-pocketed investors like SoftBank’s Vision Fund, which bankrolled it with $1.5 billion in February. Uxin’s other serious competitor is Renrenche, which raised $300 million led by Goldman Sachs a year earlier.
As part of the transaction, 58.com, a 14-year-old Chinese internet firm that went public in New York six years ago, will come into a strategic partnership with Uxin, just a few months after Uxin agreed with Alibaba to set up a used-car section on the e-commerce giant’s Taobao marketplace. Uxin said cooperation with 58.com will take place in areas such as “traffic and inventory acquisition, used-car inspections, big data analysis and SaaS.”
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