Tencent to Cut Stake in Singapore Tech Group Sea

Chinese game giant Tencent said on Tuesday it would cut its stake in Singapore-based gaming and e-commerce firm Sea Ltd., reducing its voting power to under 10%.

Founded by Li Xiaodong in 2009, Sea has three major business platforms: Shopee for e-commerce, Garena for online gaming, and SeaMoney for digital finance. Li Xiaodong graduated from the Engineering Department of Shanghai Jiao Tong University. In August 2021, he ranked first on Singapore’s list of wealthiest people with $19.8 billion.

Goldman Sachs, Morgan Stanley and Bank of America advised on the trade. According to a term sheet reviewed by Reuters, Tencent is selling 14.5 million shares between $208.00-$212.00 per share, bringing the total divestment to about $3.1 billion. The trade has not been priced, according to a person with direct knowledge. The divestment reduces Tencent‘s stake to 18.7% from 21.3%.

Regarding the sale of the shares, Tencent said that the proceeds will be used to fund other investments and social activities, such as charity. Tencent also promised not to sell any more shares of Sea in the next six months.

Less than a month ago, Tencent announced that it will distribute about 460 million shares of China’s largest retailer JD.com to shareholders in the form of interim dividends. Tencent‘s shareholding ratio in JD.com will reduce from 17% to 2.3%, losing its status as the largest shareholder of JD.com.

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