Singapore’s Sea to Raise About $2 Billion in Stock Offering
Singapore’s Sea to Raise About $2 Billion in Stock Offering
(Bloomberg) -- Singapore’s Sea Ltd., the tech startup that’s become Southeast Asia’s most valuable company, said it plans to raise about $2 billion by issuing new securities in the U.S.
Sea plans to offer 11 million American Depositary Shares, with the option to sell another 1.65 million, according to a statement. The offering would total $2.2 billion at Wednesday’s closing price or $2.6 billion with the additional shares. Goldman Sachs Group Inc. and JPMorgan Chase & Co. are bookrunners for the deal.
Sea, a games company that has expanded into e-commerce and digital payments, has surged to a market valuation of $100 billion with its shares rising more than 400% this year alone. It intends to spend the proceeds from the new offering on business expansion, “including potential strategic investments and acquisitions,” the company said in its statement.
The company just won a license to open a digital bank in Singapore, a coveted award that will allow expansion into financial services. Under criteria set by the Monetary Authority of Singapore, digital full banks are required to have total capital of at least S$1.5 billion ($1.1 billion), with S$15 million at entry and progressively increasing the capital.
The new capital could be used for its digital bank or to accelerate e-commerce and gaming investments, Bloomberg Intelligence analysts Matthew Kanterman and Joyce Ho wrote in a note.
“Sea is tapping the market at an opportune time, we believe, given its 5x share-price gains this year,” they said.
Sea’s first self-made mobile game, a battle royale called Free Fire, has attracted tens of millions of players and its gameplay is now one of YouTube’s most-watched attractions. The company’s Shopee platform has also surged in sync with greater demand for home shopping and food delivery, having taken the mantle of Southeast Asia’s leading e-commerce provider at the end of 2019, according to research firm iPrice.
Investors have been betting on Sea becoming its region’s Tencent Holdings Ltd. and Alibaba Group Holding Ltd. rolled into one, though the company’s most recent quarterly results showed a slight slowdown in its prodigious growth rate.
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