Sea Limited (NYSE:SE) (“Sea” or the “Company”) today announced
that it proposes to offer US$1 billion in aggregate principal
amount of convertible senior notes due 2024 (the “Notes”), subject
to market and other conditions. The interest rate, initial
conversion rate, offering price and other terms of the Notes have
not been finalized and will be determined at the time of pricing of
the offering. Sea intends to grant to the initial purchaser a
13-day option to purchase up to an additional US$150 million
principal amount of Notes. Sea plans to use a portion of the net
proceeds from this offering to pay the cost of the capped call
transactions described below, and to use the remainder of the net
proceeds for business expansion and other general corporate
purposes, including potential strategic investments and
acquisitions.
The Notes will be senior, unsecured obligations of the Company.
The Notes will mature on December 1, 2024, unless redeemed,
repurchased or converted prior to such date. Prior to the close of
business on the business day immediately preceding June 1, 2024,
the Notes will be convertible at the option of the holders only
upon satisfaction of certain conditions and during certain periods.
Thereafter, the Notes will be convertible at the option of the
holders at any time prior to the close of business on the second
scheduled trading day immediately preceding the maturity date. Upon
conversion, the Notes may be settled in the Company’s American
depositary shares (“ADSs”) (each representing one Class A ordinary
share of the Company), cash or a combination of cash and ADSs, at
the Company’s election.
On or after December 2, 2022, Sea may redeem for cash all or any
part of the Notes, if the last reported sale price of the ADSs has
been at least 130% of the conversion price for the Notes then in
effect for at least 20 trading days (whether or not consecutive)
during any 30 consecutive trading day period (including the last
trading day of such period) ending on, and including, the trading
day immediately preceding the date on which Sea provides notice of
redemption, at a redemption price equal to 100% of the principal
amount of the Notes to be redeemed, plus accrued and unpaid
interest to, but excluding, the redemption date (“Optional
Redemption”). Sea may also redeem for cash all but not part of the
Notes at any time if less than US$75 million aggregate principal
amount of Notes remains outstanding at such time (“Cleanup
Redemption”). In addition, Sea may redeem all but not part of the
Notes in the event of certain changes in the tax laws (“Tax
Redemption”).
In addition, holders of the Notes will have the right to require
the Company to repurchase all or part of their Notes upon
occurrence of certain events that constitute a fundamental change.
In connection with certain corporate events or if the Company
issues a notice of Optional Redemption, Cleanup Redemption or Tax
Redemption, it will, under certain circumstances, increase the
conversion rate for holders who elect to convert their Notes in
connection with such corporate event or such Optional Redemption,
Cleanup Redemption or Tax Redemption.
In connection with the pricing of the Notes, Sea expects to
enter into capped call transactions with the initial purchaser (or
its affiliates) and/or one or more other financial institutions
(the “Option Counterparties”). These capped call transactions are
generally expected to reduce the potential dilution with respect to
the ADSs and the Class A ordinary shares of the Company upon
conversion of the Notes and/or offset any cash payments the Company
is required to make in excess of the principal amount of converted
Notes, as the case may be, upon any conversion of the Notes, with
such reduction of potential dilution or offset of cash payments, as
the case may be, subject to a cap based on the cap price of the
capped call transactions. If the initial purchaser exercises its
option to purchase additional Notes, the Company expects to use a
portion of the net proceeds from the sale of the additional Notes
to enter into additional capped call transactions.
Sea has been advised that, in connection with establishing their
initial hedge positions with respect to the capped call
transactions, the Option Counterparties or their respective
affiliates expect to purchase the ADSs and/or enter into various
derivative transactions with respect to the ADSs concurrently with,
or shortly after, the pricing of the Notes. These hedging
activities could increase (or reduce the size of any decrease in)
the market price of the ADSs or the Notes. In addition, the Option
Counterparties or their respective affiliates may modify their
hedge positions by entering into or unwinding various derivative
transactions with respect to the ADSs and/or purchasing or selling
the ADSs or other securities of the Company in secondary market
transactions following the pricing of the Notes and prior to the
maturity of the Notes. The Option Counterparties may engage in such
activity during any observation period relating to a conversion of
the Notes prior to June 1, 2024, and the Option Counterparties are
likely to engage in market activity during any observation period
relating to a conversion of the Notes on or after June 1, 2024.
This activity could also cause or avoid an increase or a decrease
in the market price of the ADSs or the Notes, which could affect
the ability of holders to convert their Notes and, to the extent
the activity occurs during any observation period related to a
conversion of the Notes, it could affect the number of ADSs and
value of the consideration that holders will receive upon
conversion of their Notes.
The Notes and ADSs deliverable upon conversion of the Notes, and
Class A ordinary shares of the Company represented thereby, have
not been registered under the Securities Act of 1933, as amended
(the “Securities Act”), or any state securities laws. They may not
be offered or sold within the United States or to U.S. persons,
except to qualified institutional buyers in reliance on the
exemption from registration provided by Rule 144A under the
Securities Act and to certain non-U.S. persons in offshore
transactions in reliance on Regulation S under the Securities
Act.
This press release shall not constitute an offer to sell or a
solicitation of an offer to purchase any of these securities, in
the United States or elsewhere, and shall not constitute an offer,
solicitation or sale of the Notes, ADSs and Class A ordinary shares
of the Company in any state or jurisdiction in which such an offer,
solicitation or sale would be unlawful.
This press release contains information about the pending
offering of the Notes, and there can be no assurance that the
offering will be completed.
About Sea Limited
Sea’s mission is to better the lives of the consumers and small
businesses of our region with technology. Our region includes the
key markets of Indonesia, Taiwan, Vietnam, Thailand, the
Philippines, Malaysia and Singapore. Sea operates three businesses
across digital entertainment, e-commerce, and digital financial
services, known as Garena, Shopee, and AirPay, respectively.
Safe Harbor Statement
This announcement contains forward-looking statements within the
meaning of Section 27A of the Securities Act, and Section 21E of
the Securities Exchange Act of 1934, as amended. These statements
are made under the “safe harbor” provisions of the U.S. Private
Securities Litigation Reform Act of 1995. These forward-looking
statements can be identified by terminology such as “may,” “will,”
“expect,” “anticipate,” “future,” “intend,” “plan,” “believe,”
“estimate,” “is/are likely to,” “confident” or other similar
statements. Sea may also make forward-looking statements in its
periodic reports to the U.S. Securities and Exchange Commission, in
its annual report to shareholders, in press releases and other
written materials and in oral statements made by its officers,
directors or employees to third parties. All information provided
in this press release is as of the date of the issuance, and the
Company assumes no obligation to update the forward-looking
statements in this press release and elsewhere except as required
under applicable law. Statements that are not historical facts,
including statements about the Company’s beliefs and expectations,
are forward-looking statements. Forward-looking statements involve
inherent risks and uncertainties. A number of factors could cause
actual results to differ materially from those contained in any
forward-looking statement. Further information regarding these and
other risks is included in Sea’s annual report on Form 20-F for the
fiscal year ended December 31, 2018 and other filings with the
Securities and Exchange Commission.
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version on businesswire.com: https://www.businesswire.com/news/home/20191112006087/en/
Martin Reidy Investors / analysts: ir@seagroup.com Media:
media@seagroup.com
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