Southeast Asian gaming and e-commerce giant Sea, which is formerly known as Garena, today announced that it proposes to offer US$400 million in convertible senior notes due 2023.

Principal shareholder Tencent Holdings is expected to purchase up to US$50 million in the convertible notes.

The NYSE-listed company aims to use net proceeds from the convertible notes to support business expansion and other general corporate purposes.

In a press statement, Singapore-based Sea explained that the convertible notes will be senior, unsecured obligations of the company.

Interest will be payable semi-annually in arrears on January 1 and July 1 of each year, beginning on January 1, 2019. The notes will mature on July 1, 2023 unless redeemed, repurchased, or converted prior to such date.

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Terms of the note such as interest rate, initial conversion rate and offering price have not been finalised and will be determined at time of pricing of the offering.

It also intends to grant initial purchaser a 13-day option to purchase up to an additional US$60 million principal amount of the convertible notes.

In the first quarter of 2018, the company made US$155 million with US$110 million came from its digital entertainment arm; the company made US$93.9 million in Q4 2017, securing a 65 per cent quarter-to-quarter growth.

Its e-commerce arm Shopee made US$33.7 million in the same quarter, a 262.1 per cent increase from Q4 2017’s number of US$9.3 million.

However, the group continues to experience significant losses as it lost US$216 million in Q1 2018, almost three times increase from US$73 million in Q1 2017.

Shopee is credited for this loss as it is betting on building inventory management and logistics services to attract sellers into the platform.

Image Credit: Sea