HK-listed Electronics Retailer Gome To Raise $100m From JD.com Through Bond Sale

Hong Kong-listed electronics retailer Gome Retail Holdings Limited has entered into an agreement to raise $100 million from e-commerce giant JD.com through a convertible bond issue, it disclosed in a stock exchange filing on Thursday.

The investment will help Gome, which primarily offers electrical appliances and consumer electronics through a network of brick-and-mortar retail stores in China “accelerate its penetration in online communities,” said the company.

The partnership with JD.com will enable Gome to leverage a combination of retail channels, including a social e-commerce platform, physical stores, and the GOME mobile app, it added.

The bonds are being offered at an initial conversion price of HK$1.255 ($0.16) apiece. If the conversion rights are fully exercised, more than 621.51 million Gome shares, representing 2.88 per cent of its existing issued share capital, will be allotted.

The JD.com investment comes after Pinduoduo, a Nasdaq-listed Chinese social e-commerce platform, announced a plan in April to subscribe to $200 million worth of convertible bonds issued by Gome.

David Liu, vice president of strategy at Pinduoduo, described the plan as a “win-win-win” movement in a statement: “Consumers win because they get a wider range of top domestic and international brands at competitive prices, Gome wins because they can broaden their access to our 585.2 million users, and PDD wins because we enhance our foothold in household appliances and electronics.”