20-F: Weibo Corp. Announces ADS Lending Agreement with Goldman Sachs International

Weibo Corporation enters into an ADS Lending Agreement with Goldman Sachs International, outlining terms for borrowing and lending American Depositary Shares.

Summary

• Weibo Corporation has entered into an ADS Lending Agreement with Goldman Sachs International, effective November 30, 2023.
• The agreement allows Goldman Sachs International to borrow American Depositary Shares (ADSs) from Weibo, representing Class A ordinary shares.
• The initial loan involves 6,233,785 ADSs.
• Goldman Sachs will pay Weibo a loan processing fee of $0.00025 per Loaned ADS.
• The agreement outlines conditions for redelivery of Loaned ADSs, distributions, and potential events of default.
• The maximum number of ADSs that can be loaned is tied to the outstanding principal amount of Weibo's Convertible Notes.
• The agreement includes provisions for cash or in-kind distributions on Ordinary Shares, subject to fees, expenses, and applicable withholdings.
• Borrower shall not be entitled to receive any Loaned ADSs if the beneficial ownership of Ordinary Shares by Borrower Group would be equal to or greater than 8.5% of the Outstanding Shares, and/or the Share Amount would be equal to or greater than the Applicable Share Limit (if any applies).

Sentiment

Score: 7

Explanation: The document is a standard legal agreement, so the sentiment is neutral. However, the agreement itself suggests a positive outlook for Weibo, as it is managing its capital structure and facilitating hedging activities.

Positives

• The agreement provides Weibo with a loan processing fee.
• The agreement allows Weibo to potentially benefit from distributions on Ordinary Shares while the ADSs are loaned.
• The agreement includes standard legal protections and remedies for both parties.

Negatives

• Weibo assumes the risk of Goldman Sachs International defaulting on its obligations.
• The agreement requires Weibo to issue Ordinary Shares and deposit them with the Depositary, incurring fees and expenses.
• Weibo loses voting rights on the Loaned ADSs.

Risks

• Goldman Sachs International may default on its obligations to redeliver Loaned ADSs or make required payments.
• Changes in regulations or interpretations could affect the validity or enforceability of the agreement.
• The agreement may be terminated due to events of default by either party.
• Lender will bear any present or future stamp, transfer, court, issue, documentary, capital, registration, value-added, property or other similar taxes or duties, including any indirect transfer tax under Public Notice 2015 No. 7 and any related laws and regulations of the Peoples Republic of China (the PRC), and including any interest or penalties, if any, that arise in any jurisdiction from the transfer of the Loaned ADSs or Ordinary Shares under this Agreement or upon redelivery of the Loaned ADSs or Replacement Cash under Section 3, or otherwise in connection with this Agreement.

Future Outlook

The agreement facilitates hedging of Convertible Notes and potential future transactions involving Weibo's ADSs and Ordinary Shares.

Industry Context

ADS lending agreements are common in the financial industry to facilitate hedging and manage exposure related to convertible securities.

Comparison to Industry Standards

• It is difficult to compare this specific agreement to industry standards without access to proprietary data on similar deals.
• However, ADS lending agreements are a standard practice among publicly listed companies with ADSs and financial institutions.
• Key terms such as processing fees and redelivery conditions would typically be negotiated based on market conditions and the specific securities involved.

Stakeholder Impact

• Shareholders: The agreement could indirectly influence the share price through hedging activities.
• Employees: No direct impact.
• Customers: No direct impact.
• Suppliers: No direct impact.
• Creditors: No direct impact.

Next Steps

• Goldman Sachs International will borrow the ADSs from Weibo.
• Goldman Sachs International will manage the Loaned ADSs according to the terms of the agreement.
• Weibo will monitor compliance with the agreement and receive payments as outlined.

Key Dates

Keywords

ADS Lending Agreement, Weibo Corporation, Goldman Sachs International, American Depositary Shares, Convertible Notes, Loaned ADSs, Ordinary Shares