Singaporean gaming and e-commerce company, Sea Ltd, has raised about $6 billion in an equity and convertible bond sale, in what is Southeast Asia’s biggest fundraising. It was first announced yesterday that Sea was looking out to raise $6.3 billion in a share and convertible bond sale. Sea has now materialized this plan, setting the record for the largest fundraising in Southeast Asia.
The company priced 11 million American Depository Receipts (ADRs) and raised $2.5 billion in a convertible bond. The new capital raising comes less than a year after the company had its first and major capital raising. In December last year, Sea raised $2.57 billion in a discounted share sale at $195 a share. According to a statement, Sea priced the sale of 13.2 million American Depositary Shares at $195 each, increasing the size from 11 million because of strong demand. The company also finalized a $1 billion convertible bond sale in May 2020.
With the new funds, Sea, Southeast Asia’s largest firm by market capitalization, plans to scale up its global expansion by entering into new markets. More specifically, Sea plans to push its e-commerce platform Shopee into Europe and India. Sea added that the new capital will be used for general corporate purposes, including strategic investments and acquisitions.
Shares of Sea were up 1.6 percent in pre-market trade on Friday, and currently, Sea’s stocks are 62 percent higher for the year. Last year, Sea’s shares recorded a nearly five-fold jump amid strong demand, as the pandemic restricted movements and forced people to stay at home. For the quarter to June, Sea’s adjusted earnings before interest, tax, depreciation, and amortization for its digital entertainment business rose to $741 million, a 71 percent increase year-over-year.
Data from Refinitiv also confirmed that the deal was the largest fundraising in Southeast Asia. So far, companies have raised a total of $15.67 billion in equity capital markets in Southeast Asia in 2021, impressively higher than the $11.8 billion raised in 2020, Refinitiv data showed.
An analyst, however, criticized the company’s move; questioning the need to raise funds given that the company had $7 billion on its balance sheet at the end of June, and went on to say that the fundraising could be an early indication that Sea’s gaming business was no longer capable of funding the growth of its e-commerce and fintech counterparts.