Telegram Raises $1.7B Via Convertible Bonds: Bloomberg
Telegram, the popular messaging app boasting over 1 billion users, has successfully raised $1.7 billion through the issuance of five-year convertible bonds. This strategic move aims to address existing financial obligations and extend repayment deadlines, providing the company with greater financial flexibility.
The funds secured will be strategically allocated: $955 million will be utilized to repurchase bonds maturing in 2026, effectively reducing immediate debt pressure. The remaining $745 million will serve as fresh capital to support ongoing operations and fuel future growth initiatives. This injection of capital strengthens Telegram’s financial position and provides a robust foundation for expansion.
Investors participating in this bond offering have the option to convert their holdings into equity should Telegram decide to pursue an initial public offering (IPO) before the bonds mature. This conversion feature offers a potential upside for investors, with a redemption price set at 80% of the IPO price. The tender offer concluded on May 28th, with settlement anticipated for June 5th.
The bond issuance attracted a diverse range of investors, including both existing and new participants. Returning investors such as BlackRock, the world’s largest asset manager, and Mubadala, Abu Dhabi’s sovereign wealth fund, reaffirmed their confidence in Telegram’s prospects. Meanwhile, prominent new investors, such as hedge fund Citadel, joined the funding round, highlighting the strong market interest in Telegram’s future.
The bonds carry a 9% coupon, representing a two-percentage-point increase compared to Telegram’s previous $2.35 billion bond issued in 2021. This reflects the increased demand and the company’s enhanced financial standing. Telegram’s robust financial performance is further underscored by exceeding $1 billion in revenue last year and holding over $500 million in cash reserves, excluding cryptocurrency assets. This substantial financial foundation positions Telegram for continued success and expansion in the competitive messaging app market.
