After a strong 2018 that saw it nearly double its adjusted revenue, regional internet company Sea Ltd appears to be set to add around $1 billion to its cash pile to further escalate competition in the digital entertainment and e-commerce space in Southeast Asia.
The NYSE-listed company on Friday unveiled plans for an equity placement offering comprising 50 million American Depository Shares (each representing one Class A ordinary share). Sea said it has the option to increase this placement offering to up to 57.5 million ADS. China’s Tencent Holdings has indicated its interest to purchase $50 million worth of ADS in the offering.
Back of the envelope calculations indicate that the company will raise a little over $1 billion if one were to assume that the entire offering is taken up at $21.50 per ADS, the closing price on February 28. The final figure may vary based on the share price.
The additional capital will enable SEA to double its cash and cash equivalents to over $2 billion. The company has a cash cow in its gaming platform Garena but is also engaged in a costly e-commerce battle in the region.