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Farfetch gets $250 million from Tencent & Dragoneer

Feb '20
Pic: Farfetch
Pic: Farfetch
Farfetch, the leading global technology platform for the luxury fashion industry, has announced that it has agreed to issue and sell, via a private placement, convertible senior notes in an aggregate principal amount of $250 million to Tencent and Dragoneer. Farfetch marketplace connects customers in 190 countries with items from more than 50 countries.

Tencent, a global technology pioneer headquartered in Shenzhen, China, has committed to a strategic investment by agreeing to purchase $125 million of the notes, and San Francisco-based investment firm Dragoneer has agreed to purchase the remaining $125 million of notes. Closing of the Transaction is subject to customary conditions, according to Farfetch.

The financing will supplement Farfetch’s current liquidity position. As of December 31, 2019, the company’s cash and cash equivalents balance amounted to approximately $320 million.

The additional capital supports Farfetch’s long-term strategy of delivering a global technology platform for the luxury fashion industry and facilitates the company’s continued focus on executing its growth plans, including in the key China market, and driving towards operational profitability.

Tencent’s investment in Farfetch elevates the ongoing relationship between the two companies, which, through Farfetch’s role as the premier luxury gateway to China, is helping western luxury brands reach the Chinese consumer through Tencent’s WeChat platform. Farfetch currently powers a roster of more than 80 luxury brands on WeChat, including Moncler, Balenciaga, Saint Laurent, Armani and Ralph Lauren, and is a partner to these brands for new developments and launches on WeChat, pioneering the use of key opinion leader (KOL) mini-programmes such as Mr. Bags, Shiliupo and ByFresh.

The notes will be issued upon closing pursuant to an Indenture with Wilmington Trust, National Association, as trustee. The Indenture includes customary covenants and sets forth certain events of default after which the notes may be declared immediately due and payable and sets forth certain types of bankruptcy or insolvency events of default involving the company after which the notes become automatically due and payable.

The notes will mature on December 31, 2025, unless earlier converted, redeemed or repurchased in accordance with their terms. The notes will be senior, unsecured obligations of the company, bearing interest at a rate of 5.00 per cent per year, payable quarterly in arrears on March 31, June 30, September 30, and December 31, of each year, commencing on March 31, 2020.

Fibre2Fashion News Desk (GK)

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