(Yicai Global) Sept. 24 -- Pinduoduo, China's third-biggest e-tailer, plans to issue convertible bonds worth USD875 million so the Groupon-like e-commerce platform can enhance its agricultural supply chain.

The total on offer could reach USD1 billion if investors oversubscribe to the issue, the Shanghai-based firm said in a statement today. The cash raised will go toward research and development and new agriculture-related infrastructure as Pinduoduo looks to ramp up investment in farm technology and product systems and add 1,000 more farms in the next five years, according to a Securities Times report.

Pinduoduo has been working on integrating the back-end of its farm produce supply chain using artificial intelligence to create an 'agricultural central processing system,' which it believes will better match buyers with suppliers, the report added.

The startup's move to raise funds via equity-linked bonds, which have become increasingly popular among Asia tech companies, comes 14 months after securing USD1.6 billion in an initial public offering in New York and seven months after filing to raise a further USD1.5 billion in a secondary share sale.

Pinduoduo's shares [NASDAQ:PDD] closed down 0.76 percent yesterday and sank a further 2.66 percent in after-hours trading to USD32.99, still giving it a market cap of USD39 billion and ranking it as China's fifth-largest internet firm by that criterion.

The senior, unsecured bills come due on October 24, 2024. But on or after Oct. 1, 2022, Pinduoduo will have the right to redeem the notes for cash provided that on at least 20 trading days in the 30 prior to it executing its option, including the day immediately before, the firm's stock price was at least 130 percent of the effective conversion price.

Pinduoduo will choose to buy back once possible, even with the stock up 130 percent, Shanghai Securities News cited an anonymous worker at an investment bank as saying. Investors will not want this, so the clause effectively determines the bonds' upper price limit and thereby protects the rights and interests of existing shareholders, he added.

Editor: James Boynton