Sea Limited, the holding company for major Southeast Asian businesses such as Shopee, Garena, and SeaMoney, is seeking to raise up to $6.3 billion through an equity sale. The transaction is expected to be the largest equity sale this year.
The tech company, which is backed by Tencent Holdings, plans to offer up to 11 million shares. Based on its share price as of Wednesday's, the stake up on offer is worth about $3.8 billion. Sea also plans to issue $2.5 billion of equity-linked debt, which brings the potential injection of new capital to about $6.3 billion.
Sea has seen significant growth throughout the pandemic by expanding to industries such as e-commerce and online gaming. Its investments in video games such as Free Fire and online shopping apps such as Shopee have made the company's founder, Forrest Li, one of Singapore's richest people.
Since the start of the year, the company's share price has increased by more than 70%. In Southeast Asia, Sea invested heavily in mobile video games and e-commerce, making it one of the leaders in the two industries within the region.
Analysts at DBS Group Holdings said Sea is aiming to significantly expand its portfolio by acquiring capital to invest in growing business segments. This includes the rapidly growing e-commerce industry in Latin America and the food delivery market in Southeast Asia.
The company admitted as much and said in a statement that it plans to use the fresh capital towards further business expansions, including strategic investments and acquisitions. In December, Sea had raised more than $2.6 billion in a stock sale. It raised around $1.35 billion through a similar deal in 2019.
Sea recently made huge investments in expanding its e-commerce business in Latin America, placing it in direct competition with local companies such as Mercadolibre Inc.
Sea's planned equity sale, namely its 11 million shares on offer, will be the largest equity sale since Pinduoduo raised $4.1 billion last year. If the company's equity-linked debt is counted, the transaction will be the largest equity raised since T-Mobile's equity sale, which was also launched last year.