Sea raises US$575 mil in convertible notes offering

Sea raises US$575 mil in convertible notes offering

PC Lee
19/06/18, 11:20 am

SINGAPORE (June 19): Sea has completed its previously announced offering of US$575 million ($777 million) aggregate principal amount of 2.25% convertible senior notes due 2023.

See: Sea mulls raising funds for e-commerce as quarterly loss triples

To address investor demand, the company increased the offering size from an initial US$400 million to US$500 million, and a full exercise of a 15% “greenshoe” option by the initial purchaser brought the total offering size to US$575 million.

Sea expects to use the net proceeds from this offering for business expansion and other general corporate purposes, including supporting the growth of the company's e-commerce platform, Shopee.

"With this additional capital further bolstering our balance sheet, we are in an excellent position to continue to capture the significant growth opportunity ahead of us, particularly in the highly promising e-commerce sector where Shopee is already a regional leader," says Forrest Li, Chairman and Group CEO of Sea.

In the first quarter of 2018, Shopee recorded gross merchandise value (GMV) of US$1.9 billion, representing an increase of 199.5% year-on-year from the first quarter of 2017. The company recently raised its guidance for e-commerce GMV for the full year of 2018 to a range between US$8.2 billion and US$8.7 billion, representing 99.4% to 111.5% growth from 2017. Sea had previously predicted that e-commerce GMV would be between US$7.5 billion and US$8.0 billion, representing 82.4% to 94.5% growth.

Sea's convertible senior notes were offered to qualified institutional buyers and interest is payable semi-annually in cash at a rate of 2.25% per annum in arrears on Jan 1 and July 1 of each year, beginning on Jan 1, 2019.

The notes mature on July 1, 2023 and are convertible into the company's American depositary shares (ADSs), based on an initial conversion rate of 50.5165 of ADSs per US$1,000 principal amount of notes.

This is equivalent to an initial conversion price of approximately US$19.80 per ADS and represents an approximately 32.5% conversion premium over the closing trading price of the company's ADSs on June 13 which was US$14.94 per ADS.

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