The Chinese real estate marketplace operating company FangDD has announced that it will raise $21 million via a convertible note purchase agreement.
According to a press release, the transaction is expected to go through in February and will see FangDD issue a convertible promissory note to an unnamed investor.
Along with the convertible note issuance, FangDD will also enter a share subscription agreement under which it will issue 7,875,000 class C ordinary shares and sell them to a company controlled by its own Chairman and CEO Xi Zeng.
"To maintain a stable corporate structure following the potential conversion of the Note, the Company has entered into a share subscription agreement, under which the Company has agreed to sell and issue up to 7,875,000 class C ordinary shares of the Company with the same rights, privileges and restrictions approved by the board of directors on November 29, 2022 to ZX INTERNATIONAL LTD, a British Virgin Islands company controlled by Mr. Xi Zeng, the chairman of the board of directors and chief executive officer of the Company."
Like many Chinese real estate marketplace companies, FangDD (not to be confused with Fang.com) has seen performance impacted heavily over recent years by a combination of factors including the Chinese government's covid-zero policy and a real estate bubble in the market.
FangDD is listed on the Nasdaq and is currently attempting to comply with a delisting warning received in October 2022. The company must raise its market value above the $5 million threshold by April 18th or risk being stuck off the index. The company recently made boardroom changes as GMV decreased by 80% for the first half of 2022.