Singapore’s Sea prices $500m convertible note, Tencent to pick up to $50m of issue

Sea leadership team (including Chairman & Chief Executive Officer Forrest Li and President Nick Nash) on the podium. Credit: NYSE

Singapore-based online gaming and e-commerce company Sea Ltd  has priced its $500 million convertible senior notes which are due in 2023. The company also said that its affiliate Tencent Holdings would purchase up to $50 million of the offering.

In an announcement today, Sea said, up to $30 million of the notes will be bought by an affiliate of one of Sea’s directors.

Interest on the notes will be payable semi-annually in cash at a rate of 2.25 percent per annum, it added. Sea said, it will utilise the proceeds for expanding its business.

The notes offering will close on June 18, 2018. Initial purchasers will have the option to purchase up to $75 million principal amount of notes within a 13-day period of the initial issuance date.

Yesterday, Sea had said it planned to issue $400 million worth of convertible senior notes due 2023. But the interest rate, initial conversion rate, offering price and the terms of the notes had not been finalized, which be determined at the time of pricing of the offering.

The company, where Tencent is its biggest shareholder, reported a larger-than-expected fourth-quarter loss in February as marketing expenses for its e-commerce unit Shopee. Sea had then said it may raise funds to strengthen its balance sheet.

Founded by chairman and group CEO Forrest Li in 2009, Sea began as an online gaming company named Garena, which was later rebranded to reflect is ambition and diversification. It branched out to digital service Airpay in 2014 and e-commerce Shopee in 2015.

Sea’s stock closed Wednesday at $14.94, down $1.46 or 8.90 per cent.