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WeChat proprietor Tencent seeks $2 billion loan for FinTech expansion

Fri 15 Apr 2016

The Chinese internet giant Tencent Holdings Ltd, most famous for its WeChat messaging app, is reported to be soliciting a loan that could run as high as two billion dollars in order to deepen its interests in the FinTech sector.

The information was provided to Reuters from undisclosed sources who said that they were not authorised to discuss the matter. According to the sources Tencent is proposing a bullet loan of between $1.5-$2 billion. Under the arrangements of such a loan, the entire amount is repaid at the end of term.

The sources added that Tencent is likely to be considering the same group of 19 banks that it turned to for its loan in December of last year, including HSBC, Citigroup, Hong Kong’s Bank of China, Mizuho Bank and ANZ. Tencent’s spokeswoman declined to comment on the story.

The holding company, which claims to cater to China’s largest internet community, and which is dedicated to providing ‘one-stop online lifestyle services’, hit a market cap of $200 billion a year ago, after an increase of 52% in the four months leading up to the assessment.

Tencent is owned by the international e-commerce media group Naspers, and has a formidable media portfolio, including exclusive Chinese distribution rights to Sony, Warner Music and YG Entertainment, as well as the mobile text and voice messaging communication service WeChat, which at last count boasted 650 million users.

The company, founded in 1998, has a consistently-growing portfolio of acquisitions and strategic investments, including projects as idiosyncratic as a Scottish indoor positioning company. In December Tencent invested heavily in games media producer Activision, and acquired League Of Legends games developer Riot Games outright.

If the rumours of the loan are authentic, Tencent is joining a Chinese trend towards FinTech investment and innovation. With Jack Ma’s ZhongAn online insurance group heading a list of Chinese FinTech leaders, the country is making a significant bid for a vanguard position in the field. It’s a pre-eminence which is worrying the City of London, still the central hub of European and western banking.


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