By Yifan Wang

Yeahka Ltd. shares slump in Hong Kong after the Chinese digital-payments company said it is planning a US$70 million convertible bonds issuance.

The stock lost as much as 17% with an hour of trading in the morning session, and was last down 15% at 18.94 Hong Kong dollars (US$2.41). That is its lowest intraday level in more than a month and one of the weakest prices since it started trading in 2020.

The slide came after Yeahka said on Tuesday that it has agreed to issue US$70 million worth of convertible bonds to J.P. Morgan Securities PLC and Credit Suisse (Hong Kong) Ltd.

The bonds, due in 2027, will carry a 6.25% annual coupon and an initial conversion price of HK$23.32 a share. If all those bonds are converted into shares, Yeahka's share total would increase by about 23.55 million, or 5.21% of the current amount, which could lead to some price dilution.

Yeahka said it plans to use the bond issue proceeds mainly for its overseas expansion.

Tuesday's selloff extends the broad downturn the stock has been on since last year. Yeahka's shares have declined in line with the overall weakness in China's tech sector in the face of an aggressive regulatory crackdown and weakening macroeconomic conditions. The stock is down more than 59% in the past 12 months.


Write to Yifan Wang at yifan.wang@wsj.com


(END) Dow Jones Newswires

07-05-22 0009ET