China data center and cloud-services provider GDS Holdings is seeking to raise up to HK$13.8 billion ($1.8 billion) through a secondary listing in Hong Kong.

Its Nasdaq-listed American depositary shares were trading at $81.89 in pre-market activity Wednesday.

According to a term sheet, GDS Holdings is planning to sell up to 160 million shares at HK$86 each at the top end. The price is a 10% premium over the company's American depositary shares on the Nasdaq on Tuesday - which closed at $80.67 per share. Each of the company's American depositary shares represents eight of its ordinary shares.

Depending on demand, the company has the option to sell an additional 24 million shares during its secondary share sale. Bank of America, JPMorgan, Haitong International and China International Capital Corp. are joint sponsors.

GDS Holdings is expected to begin its local share offering this week and through Tuesday. The trading of the company's stock in Hong Kong is expected to begin Nov. 2, it said.

In its prospectus, GDS Holdings says it is China's largest carrier-neutral data center service provider. It said that it takes up about 22% of the country's cloud services market - which was valued at more than 149 billion yuan ($22.38 billion) in 2019. The industry is expected to quadruple in value over the next four years to more than 645 billion yuan, the company added.

GDS Holdings said in its term sheet that the proceeds of the transaction would mostly be used for research and development into new technologies related to data centers. The rest will be used to build new data centers to expand the company's capabilities and meet China's growing demand.

Since last year, more than a dozen U.S.-listed companies have decided to launch secondary listings close to home. The trend was led by China technology giant Alibaba Group, which successfully launched a secondary listing in Hong Kong in November. NetEase and JD.com, raised a combined $15.4 billion.