China’s No. 2 smartphone maker Xiaomi Corp. has raised US$4 billion ($5.36 billion) from a combined share placement and sale of convertible bonds, adding to a war chest aimed at expanding its market share from competitor Huawei Technologies Co.

Xiaomi has sold 1 billion shares in a top-up placement at HK$23.70 ($4.09) each, the bottom of the range, to raise US$3.1 billion, according to terms of the deal obtained by Bloomberg News. That represents a 9.4% discount to its closing price of HK$26.15 on Monday. It’s Hong Kong’s largest top-up placement on record, data compiled by Bloomberg show.

Xiaomi has also fetched US$900 million through a seven-year, zero-coupon convertible bond at a conversion premium of 55% above the reference share price, which is the offering price of the equity placement, the terms show.

Xiaomi shares had been on a rally this year, rising 146% from a year ago. However, its stock slipped after it disclosed that its internet services revenue had grown at its slowest pace in three years in the September quarter. It grabbed market share from Huawei when American sanctions deepened particularly in overseas markets from Europe to India.

The proceeds from the equity placement will be used for business expansion, investments to increase market share and strategic ecosystem investments, the terms showed.

Credit Suisse Group AG, Goldman Sachs Group Inc, JPMorgan Chase & Co. and Morgan Stanley are arranging Xiaomi’s offering.

Xiaomi raises US$4 bill selling shares, convertible bonds

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Xiaomi raises US$4 bill selling shares, convertible bonds

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