Naspers trims Tencent stake


Naspers trims Tencent stake

Published Date: 2018-03-23 | Source: Stephen Gunnion | Author: Stephen Gunnion

Naspers trims Tencent stake

The company has pledged not to sell any more shares for at least three years due to its long-term belief in Tencent

Naspers plans to sell down its stake in Chinese Internet and gaming associate Tencent to boost its balance sheet and accelerate growth in its other investments.

The Internet and media giant said yesterday it would sell up to 190 million Tencent shares, equal to about 2% of Tencent's total issued share capital. That will reduce Naspers' holding in Tencent to 31.2% from 33.2%.

Naspers said the funds would be used to reinforce its balance sheet and would be invested over time to accelerate the growth of its classifieds, online food delivery and fintech businesses globally and to pursue other opportunities that arose. The Company has not previously sold any Tencent shares since it invested in 2001. It said it would not sell any further Tencent shares for at least the next three years, in line with its long-term belief in Tencent's business."

"The company considers Tencent to be one of the very best growth enterprises in any industry in the world, managed by an exceptionally able team," Naspers said in a statement. "Tencent understands and supports the intention to sell."

The Tencent shares will be offered to institutional investors globally, subject to customary selling restrictions. It has appointed Bank of America Merrill Lynch, Citigroup and Morgan Stanley as Joint Global-coordinators and Joint Book-runners to manage the accelerated offering.

On Wednesday, Tencent reported a near doubling in fourth-quarter profit but said investments in content and technology would weigh on margins as it spends on new investments which may affect its near-term profitability going forward. Total revenue for 2017 rose 56% to $36.4 billion, while attributable profit increased by 74% to $10.9 billion.

Naspers fell 4.6% to R3 300 yesterday, tracking a 5% fall in Tencent's shares.

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