Sea looking to raise US$6.3b in S-E Asia's biggest fundraising

Hong Kong

E-COMMERCE and gaming company Sea is looking to raise US$6.3 billion in a share and convertible bond sale in South-east Asia's largest ever capital raising, tapping growing investor interest in the region.

This is the second major fund raising in less than a year for the US$185 billion company, which is seeking to scale up its global expansion by testing out possible new markets, and the latest among a slew of deals in South-east Asia.

Sea, known for its Shopee e-commerce platform, is looking to sell 11 million American Depository Receipts with the option to offer 1.65 million more as part of a so called greenshoe option, the Singapore-headquartered company said in a regulatory filing on Thursday.

It is also raising US$2.5 billion in a convertible bond that has a US$375 million greenshoe attached. At Sea's closing stock price of US$343.8 in New York on Wednesday, the share sale could raise up to US$3.8 billion.

The combined deal would be the largest ever capital raising for a South-east Asian company, Refinitiv data showed.

Sea is "not really burning through cash", Aequitas Research director Sumeet Singh said, adding the latest raising "looks opportunistic rather than something that the company needs".

Given Sea had nearly US$7 billion of cash on its balance sheet at the end of first half, this deal will bolster that to nearly US$13 billion, Mr Singh, who publishes on Smartkarma, said.

Sea, the biggest among all South-east Asian companies by market value, plans to use the proceeds for general corporate purposes, including strategic investments and acquisitions.

Sea's Shopee is planning to expand into Europe and India, Reuters has reported. Late last year, Sea also secured a full digital bank licence in Singapore.

Fintech and e-commerce companies in South-east Asia have been raising hefty amounts of capital as global investors bet on post-pandemic technology plays emerging in the region.

Sea shares have risen 72.72 per cent this year, after an almost five-fold jump in 2020 amid strong demand as Covid-19-related restrictions forced people indoors.

So far in 2021, companies have raised a total of US$15.67 billion in equity capital markets in South-east Asia - the most in three years, Refinitiv data showed - versus US$11.8 billion over the corresponding period in 2020.

Among other deals, South-east Asia's biggest ride-hailing and delivery firm Grab raised over US$4 billion this year as part of its nearly $40 billion record valuation in a SPAC deal, while sources say Indonesia's biggest tech group Goto is set to complete a pre-IPO funding exercise this year. REUTERS

READ MORE: Sea's mega fundraising will test market appetite for e-commerce goals