TENCENT Raises Billions in a bond sale

The Chinese company TENCENT HOLDINGS LTD. is raising $6 billion in a bond sale. They are inflating this amount even when they already have $20 billion in wallet. Now, this brings a big question mark (?)

Details about Bond sale

A 20 Years old company issues $6 billion with $20 billion already in notecase. This clears that they are going to steep more money in future. They admitted to use the cash to pay for debt maturing in May and spend the remaining for general expenses. Moreover, their plans aren’t clear from their side in the spending of the capital. These big plans may bring tremendous change in the field. However, the statement below says it all –

“We have a strong balance sheet with significant cash position and a rich pool of listed securities. Going forward, we will continue to exercise discipline in our financial management and focus on maintaining the right balance between capital expenditure, investments and returns,” CFO John Lo said in a statement.

They increased their Global Medium Term Note Programme limit to $20 billion from $10 billion. So, this is what the news channels say :

“The Company currently intends to use the net proceeds from each issue of the Notes to be issued under the Programme for the Company’s general corporate purposes. If, in respect of any particular issue, there is a particular identified use of proceeds, this will be stated in the applicable Pricing Supplement.
Deutsche Bank will arrange the programme for Tencent.”

According to their gaming market ,they also catalogued –

“The internet, telecommunications, and other related industries are highly regulated Regulations issued or implemented by the State Council, MIIT, MOC,SAPPRFT and other relevant government authorities cover many aspects of our telecommunications, Internet information and other related services, including entry into the telecommunications industry, the scope of permissible business activities, licences and permits for various business activities and foreign investment.”

Another issue found was the low rate economic growth of China which mainly affects their advertising division. Although, the company is well established digitally across the globe with partial ownership of Epic Games and titles like Clash Royale and PUBG Mobile giving them a bit of advantage amongst others.

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Ayush Mittal Author

Hello, I'm Ayush Mittal. I'm a firm believer of " you will only achieve what you can think of ". I am a lover of sports and music because both help in making our mind and body 'sound'. I am preparing myself to make a mark in the corporate world.


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