Naspers raises $9.8 bn from 2% Tencent share sale; may invest in OLX, Swiggy, PayU

Naspers raises $9.8 bn from 2% Tencent share sale; may invest in OLX, Swiggy, PayU
Photo Credit: Photo Credit: Shah Junaid/VCCircle
22 Mar, 2018

South African technology major Naspers announced on Friday that it has raised $9.8 billion from the sale of 2% of its holdings in Chinese internet conglomerate Tencent as part of efforts to strengthen its balance sheet and fund growth in its e-commerce businesses.

Naspers had said a day earlier that it plans to sell up to 190 million Tencent shares. The sale took place via an accelerated bookbuilding process, reducing its holdings to 31.2% from 33.2% earlier,

It may look to invest a part of the proceeds in Indian startups, including in internet technology companies. In the past, both Naspers and Tencent have backed several Indian startups, including Flipkart, Ola, Makemytrip-Ibibo, Swiggy, Practo, Gaana and PayU.

Naspers CEO Bob van Dijk said the funds will be invested over time to accelerate growth of its classifieds, online food delivery and fintech businesses, globally, apart from pursuing other exciting growth opportunities.

“These funds are intended to be utilised to reinforce Naspers’ balance sheet and invested over time in Naspers’ key focus segments. Naspers also announces a commitment not to sell any further Tencent shares for at least three years,” the company said.

Naspers had first backed Tencent in 2001. Tencent Holdings Ltd had recently crossed $500 billion in market capitalisation and is listed on the Nasdaq and Hong Kong markets.

“We believe Tencent is one of the very best growth enterprises in any industry in the world, managed by an exceptionally able team. However, we also want to fund further development of some of Naspers’ core business lines. We want to consolidate some market positions, accelerate growth, and bring a few businesses to self-funding status faster with additional support,” said Naspers chair Koos Bekker. 

Bank of America Merrill Lynch, Citigroup and Morgan Stanley had been appointed joint global-coordinators and joint book-runners to manage the transaction. 

Founded in 1915, Naspers is one of the largest technology investors in the world and operates across 120 countries. Its global portfolio companies include Delivery Hero, which ran Foodpanda before Ola acquired it in December last, OLX, SimilarWeb and Udemy.

Update: The story was updated to reflect the completion of the share sale.