Grab plans US$1.25bil convertible bond sale for acquisitions
Grab's app is ubiquitous in Southeast Asia for ride-hailing and food delivery. (AFP pic)
SINGAPORE : Grab Holdings Ltd is planning a US$1.25 billion sale of bonds convertible into stock, partly to bulk up its warchest for acquisitions amid signs that talks to take over rival delivery-and-transport provider GoTo Group have stalled.
Singapore-based Grab, whose app is ubiquitous in Southeast Asia for ride-hailing and food delivery, will issue convertible bonds that mature on June 15, 2030, it said in a statement yesterday.
The securities will carry a coupon of as much as 0.5% a year, payable semi-annually, according to terms of the deal seen by Bloomberg News.
Grab joins the flurry of sales of bonds that can be swapped into stock by Asian companies this year.
That's particularly been the case with Chinese firms as issuers from Baidu Inc to Ping An Insurance Group Co of China announced sizeable deals in recent months.
Aside from possible acquisitions, Grab said it plans some share buybacks – the company has US$274 million remaining under its share-repurchase program as of the end of March.
The bonds will be redeemable, under certain conditions, from mid-2028.
As for the GoTo acquisition, Grab yesterday signalled that it was halting or at least pausing a planned US$7 billion acquisition.
The pair of ride-hailing and food-delivery companies have held on-and-off talks for years but a combination never materialised, partly because of antitrust concerns likely to arise from combining the two dominant players in Southeast Asia.
Grab's offering is the largest Asian convertible-bond deal denominated in US dollars since Ping An's US$3.5 billion deal in July 2024, and the biggest by a non-Chinese company since Korean chipmaker SK Hynix Inc's US$1.7 billion issuance in 2023.
Ping An last week also issued convertible bonds worth US$1.5 billion, denominated in Hong Kong dollars.
Morgan Stanley, HSBC Holdings Plc and JPMorgan Chase & Co are joint global coordinators of the deal.
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