By South China Morning Post | Created at 2026-09-07 11:31:36 | Updated at 2026-09-07 12:30:47
1 hour ago
Tencent Holdings’ pivot from a core shareholder to a major creditor in
Bilibili offers a clear window into how China’s Big Tech players are rebalancing portfolio risk while funding expensive artificial intelligence initiatives.
The shift, executed through Bilibili’s proposed US$700 million convertible bond package announced on Friday, allows Tencent to lock in capital flexibility without severing ties with one of China’s largest online video platforms, according to analysts.
Here is a look at Tencent’s strategic move.
What does the capital restructuring involve?
Bilibili plans to issue US$700 million in convertible senior notes maturing in 2031, according to a filing with the Hong Kong stock exchange.
Under the deal, Tencent’s subsidiary, Huang River, would subscribe to US$200 million of Bilibili’s convertible bonds. At the same time, Tencent would sell about 26.4 million Bilibili shares via a secondary placement at HK$115.38 per share, generating nearly US$400 million in gross proceeds.
Bilibili would allocate proceeds from the bond issuance to buy back US$200 million in shares directly from Tencent, alongside an additional US$100 million public buy-back to cushion market dilution.
By restructuring Tencent’s equity sell-down into a convertible bond transaction, the deal helps cushion Bilibili’s share price against sudden volatility.
Shares of Bilibili fell as much as 2.7 per cent in early Monday trading in Hong Kong as investors digested Tencent’s stake reduction, before rebounding to close up nearly 2 per cent at HK$123.80.
