Tencent-backed China Ruyi aims to raise up to $500 million in convertible bonds, sources say

HONG KONG (Reuters) - Streaming media firm China Ruyi Holdings ( HNTGF ), backed by gaming and internet company Tencent ( TCTZF ), is aiming to raise between $300 million and $500 million in convertible bonds next week, two sources with knowledge of the plan said.

The offering of Hong Kong-listed Ruyi could be launched as early as Monday, said one of the sources.

The bulk of the proceeds to be raised could be used for a potential acquisition, the sources said.

Discussions around the acquisition, however, are at early stages and may not be fruitful, said the sources, who declined to be named as the information was confidential.

Ruyi has tapped Bank of America, CLSA, Deutsche Bank, Goldman Sachs and Macquarie to work on the convertible bond offering, said one of the sources.

Ruyi did not immediately respond to a request for comment.

CLSA, Goldman, Deutsche Bank and Macquarie declined to comment. Bank of America did not immediately respond to a request for comment.

Ruyi's fundraising comes as Chinese firms are accelerating offshore equity fundraising efforts, tapping into a rebound in investor sentiment fueled by hopes of Beijing's support for private firms.

The fundraising momentum, however, could get clouded by U.S. President Donald Trump's new tariffs announced on Wednesday, a move that has sent shockwaves through markets amid worries the aggressive duties will slow growth and hit corporate earnings.

China equity capital markets' fundraising totalled $24 billion in the first quarter, up over 200% from the same period last year, LSEG data showed.

Convertible bonds offering by Chinese companies increased more than five times year-on-year in the same period to reach a total value of $4.9 billion, the data showed.

Ruyi, which counts Tencent ( TCTZF ) as its second largest shareholder with a 16.4% stake and a major customer, engages in online streaming services, film and television production and distribution business as well as online gaming services.

It has produced several hit Chinese series such as "To the Wonder" and "War of Faith".

The company on Monday reported a total revenue of 3.7 billion yuan for 2024, up 1.4% year-on-year. Its adjusted net profit more than doubled to 1.25 billion yuan.

(Reporting by Kane Wu and Julie Zhu; Editing by Sumeet Chatterjee and Muralikumar Anantharaman)