Food-delivery firm Meituan aims to raise US$1 billion in bond sale

Chinese food-delivery giant Meituan is planning to raise approximately US$1 billion through an offshore yuan bond offering, according to sources familiar with the matter. The company has received approval from Chinese regulators to raise a larger amount offshore, but has chosen to reserve a portion of the quota for dollar bond refinancing when market conditions are favorable.

Meituan representatives informed investors during a call on Monday, emphasizing that the quota is set to expire next September. The bond offering is anticipated to be priced on Tuesday. Amidst the easing competition in China's food delivery and retail sectors following a government crackdown, Meituan is raising debt to alleviate some pressure on its segment.

The proceeds from the sale will primarily be utilized for refinancing offshore yuan-denominated loans. In its last bond issuance, Meituan raised about US$3 billion by selling dollar securities and offshore yuan notes last year, which remains its largest regular bond issuance to date. The company projects its capital expenditure to reach around 20 billion yuan (US$3 billion) in 2026 and a slight increase in 2027.

Yuan financing has gained significant traction among Chinese and foreign firms due to its lower costs. In 2024 alone, government and corporate issuers have sold over 1 trillion yuan of dim sum notes outside mainland China, a record high, as per Bloomberg data. Earlier this month, Tencent Holdings successfully raised 26 billion yuan of such notes, marking its first time surpassing its dollar tranche in a single offering.

Meituan has also developed its own large language models for artificial intelligence, known as the LongCat series, but has not updated its AI offerings as rapidly as competitors like Alibaba Group Holding or ByteDance.