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PAG secured $500 M debt funding from video streaming provider IQiyi

A subsidiary of Asia Pacific-focused alternative investment firm PAG has received US $500 million in secured convertible senior notes from China-based video streaming provider IQiyi.

Long-form video is the main emphasis of the 2010-founded streaming site iQiyi, which is supported by Baidu. The alleged “Netflix of China” competes against other domestic options like Youku Tudou and Tencent Video, which are supported by Alibaba and Tencent, respectively.

The notes will be convertible into iQiyi’s American depositary shares, according to a release. The notes will maturity five years from the date of issuance and feature a 6% interest rate.

“We will work with the company to further its goals of expanding the region’s leading online entertainment video service,” said Weijian Shan, executive chair of PAG. Shan was also appointed to the board of iQiyi as a non-voting member of the audit committee and a member of the compensation committee.

This development comes after iQiyi and Douyin, the Chinese equivalent of ByteDance’s TikTok, formed a collaboration to allow snippets from the former’s shows to be submitted as short videos on the latter’s platform.

For the third quarter of 2022, IQiyi also disclosed operating income of US $43.5 million. In comparison to the same quarter a year earlier, total sales decreased by 2% to US $1.1 billion, but net loss shrank by more than 4x to US $55.6 million.

 

 

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