Key Takeaways:
Horizon Robotics raised US$450 million via zero coupon convertible bonds due 2027, netting about US$445.5 million to strengthen its capital base as the autonomous driving chipmaker expands partnerships.
The bonds carry an initial conversion price of HK$5.55 per Class B share, the company said in a filing. Full conversion would give bondholders about 4.18% of the enlarged share capital, creating moderate dilution for existing investors. Horizon applied to list the bonds on the Vienna Stock Exchange's Vienna MTF and secured approval for the corresponding conversion shares in Hong Kong. After deducting underwriting commissions and other estimated expenses, net proceeds totaled about US$446 million.
Citi initiated a 30-day positive catalyst watch on Horizon following the deal, citing deepened cooperation with Volkswagen Group. The bank rates the stock a Buy with a HK$8.70 price target, implying about 57% upside from the last close. Shares of Horizon rose 5% on Wednesday to HK$5.25, giving the company a market capitalization of about HK$67.8 billion. The stock has averaged daily turnover of about 217 million shares.
The US$445.5 million in net proceeds strengthens Horizon's balance sheet as it scales production of its Journey series automotive AI chips for the Chinese electric vehicle market. The company, founded by Dr. Kai Yu and listed in Hong Kong under a weighted voting rights structure, competes with Nvidia Corp. and Mobileye Global Inc. in the autonomous driving chip segment. Horizon's governance structure includes a mix of executive, non-executive, and independent non-executive directors, balancing founder influence with board oversight.
The debt financing gives Horizon additional runway to invest in research and development without immediate equity dilution beyond the 4.18% conversion overhang. Investors will watch for further partnership announcements with global automakers as Horizon expands beyond its domestic customer base, with the Volkswagen collaboration serving as a potential template for additional European OEM deals.
This article is for informational purposes only and does not constitute investment advice.
