Singapore's Sea raises US$2.57b in upsized stock offering

[SINGAPORE] Singapore's Sea Ltd, the tech startup that's become South-east Asia's most valuable company, increased the size and set the final price of a secondary stock offering to raise at least US$2.57 billion.

Sea priced the sale of 13.2 million American Depositary Shares (ADS) at US$195 each, increasing the size from 11 million because of strong demand, according to a statement. The underwriters, led by Goldman Sachs Group and JPMorgan Chase & Co, have the option for another 1.98 million ADS, which would yield US$386 million at the same price.

Sea, a games company that has expanded into e-commerce and digital payments, has surged to a market valuation of almost US$100 billion with its shares rising 395 per cent 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 licence 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, 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.

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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 South-east 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 and Alibaba Group Holding rolled into one, though the company's most recent quarterly results showed a slight slowdown in its prodigious growth rate.

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READ MORE: Singapore's Sea to raise about US$2b in stock offering