Singapore-based eCommerce and gaming firm Sea Ltd (NYSE: SE) has secured $6 billion funding in a convertible bond and equity sale, making the largest fundraising in the ASEAN region. The company priced around 11 million American Depository Receipts at $318 each plus a convertible bond of $2.5 billion.
Sea completes the largest fundraising in Southeast Asia
It is vital to note that it is the company that runs the popular online marketplace Shopee, which has grown to expand to Latin American and across Asia. According to a Reuters report, the company is pushing to expand into Europe by opening its operations in Poland.
Sea has seen its stock gain 62% year to date, and following the announcement, shares jumped 1.6% pre-market on Friday. Currently, the company is the most valuable public company in Southeast Asia. Last year the stock jumped almost five times following solid demand during the pandemic as people stayed indoors due to restrictions. A source familiar with the fundraising, which is the largest in ASEAN region as per Refinitiv data, said:
“Given the huge level of investor interest in tech stocks and with interest rates so low, it’s always good to bulk up finances.”
The company reported adjusted EBITDA growth of 71% for the digital entertainment business for the June quarter, rising to $741 million.
Should there be an exercise of the overallotment of the convertible bo9nd issuance and share sales, the total amount raised could increase to $6.9 billion as per the company’s regulatory filings. This could make Sea the largest fundraising company by an Asian firm listed in the US. The equity and bond sale was the second for Sea, which completed another raise in December of $2.6 billion.
Sea had $7 billion in cash at the end of June.
The company indicated that it would use the amount for potential acquisitions and strategic investments in the regulatory filings. However, one analyst was skeptical about the need to raise this amount of money, considering Sea had around $7 billion in cash in its books at the end of the June quarter. Lightstream Research analyst Oshadhi Kumarasiri said:
“The reason for this fund raising could be an early indication that the gaming business is no longer capable of funding the e-commerce and fintech growth.”
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