Tencent to sell $3bn of shares in Singaporean gaming company Sea Ltd

Tencent will sell more than $3bn worth of its shares in the Singaporean gaming and ecommerce group Sea Ltd, less than a month after it sold down its stake in JD.com, the Chinese ecommerce business.

China’s most valuable tech company said that once the transaction completes, its equity interest in Sea will fall from 21.3 per cent to 18.7 per cent. The shares being sold were worth about $3.2bn at the closing price on Tuesday.

In a statement, it said it would retain the “substantial majority” of its equity in Sea “for the long term” and would sell no more shares for the next six months. It gave no reason for the sale, but said the proceeds would “fund other investments and social initiatives”.

The sale comes a month after Tencent said it would distribute $16bn of shares in the Chinese online shopping group JD.com to shareholders, cutting its stake from about 17 per cent to 2.3 per cent.

A person close to Tencent said at the time of the JD.com move that while regulators have not asked it to sell down its investments, which are collectively worth some $259bn according to analysts at Bernstein, the company is keen to show it is not “empire building”.

The company did not want “to be seen to be exerting massive influence over a huge segment of the economy in perpetuity”, the person added.

As well as selling down its stake in Sea Ltd, Tencent also said it would convert its class B shares, which currently carry three votes each, into class A shares at Sea’s AGM in February. After the convention Forrest Li, Sea’s chief executive, will hold all class B shares and Tencent’s voting power in Sea will fall to less than 10 per cent.

Tencent has been a major investor in Chinese technology firms, but over the past year the company has also rapidly expanded its overseas investments.