Sea Limited Raises US$575 Million in Convertible Notes Offering

  • Offering size increased from US$400 million to US$500 million to
    address investor demand; full exercise of 15% ‘greenshoe’ option
    brings total offering to US$575 million
  • New financing will support Sea’s business expansion, including the
    continued expansion of Sea’s rapidly-growing e-commerce platform,
    Shopee

SINGAPORE–(BUSINESS WIRE)–Sea Limited (NYSE: SE) (“Sea” or the “Company”) today announced the
completion of its previously announced offering of US$575 million
aggregate principal amount of 2.25% Convertible Senior Notes due 2023
(the “Notes”). To address strong investor demand, the company increased
the offering size from an initial US$400 million to US$500 million, and
a full exercise of a 15% ‘greenshoe’ option by the initial purchaser
brought the total offering size to US$575 million.

Sea expects to use the net proceeds from this offering for business
expansion and other general corporate purposes, including supporting the
growth of the Company’s e-commerce platform, Shopee.

“With this additional capital further bolstering our balance sheet, we
are in an excellent position to continue to capture the significant
growth opportunity ahead of us, particularly in the highly promising
e-commerce sector where Shopee is already a regional leader,” said
Forrest Li, Chairman and Group Chief Executive Officer of Sea. “The
enthusiastic response to this offering highlights the strength of global
investor interest in Sea’s unique position at the heart of our region’s
burgeoning consumer growth story, and we believe this convertible notes
offering is a highly cost-effective means for us to tap into this
demand. We are pleased to deepen our engagement with several of our
existing investors through this transaction, and to partner with a
number of new investors who share our excitement in the potential of our
region and recognize Sea’s unrivaled leadership.”

Mr. Li continued, “Shopee is scaling rapidly, ahead of our already
ambitious expectations, and benefiting from ever improving cost
efficiencies as it grows. We intend to continue to invest in extending
our leadership position in e-commerce, and in providing new and
innovative services that will ensure buyers and sellers across the
region enjoy a superior e-commerce experience on Shopee.”

Rapid Growth and Improving Cost Efficiencies at Shopee

Shopee has grown rapidly over the last year and in the first quarter of
2018 recorded gross merchandise value (“GMV”) of US$1.9 billion,
representing an increase of 199.5% year-on-year from the first quarter
of 2017. The Company recently raised its guidance for e-commerce GMV for
the full year of 2018 to a range between US$8.2 billion and US$8.7
billion, representing 99.4% to 111.5% growth from 2017. Sea had
previously predicted that e-commerce GMV would be between US$7.5 billion
and US$8.0 billion, representing 82.4% to 94.5% growth.

Shopee is also benefiting from improved cost efficiencies as it expands,
with sales and marketing expenses at Shopee in the first quarter of 2018
falling both in absolute terms and as a percentage of GMV, compared to
the fourth quarter of 2017. In the first quarter of 2018, Shopee’s sales
and marketing expenses were 6.6% of GMV, compared to 8.5% of GMV in the
fourth quarter of 2017.

In recent quarters, Shopee has also introduced a number of value-added
services to improve the e-commerce experience for the platform’s fast
growing seller base across the region. These include ‘Service by
Shopee’, which gives sellers a choice of value-added services such as
inventory management, online store operations, and fulfillment services,
and ‘Shopee Logistics Service’, which is tailored to sellers with
complex logistical requirements such as cross-border fulfillment.

Completion of Convertible Notes Offering

The Notes were offered to qualified institutional buyers pursuant to
Rule 144A under the United States Securities Act of 1933, as amended
(the “Securities Act”), and certain non-U.S. persons in offshore
transactions in compliance with Regulation S under the Securities Act.
The Notes are senior, unsecured obligations of the Company, and interest
is payable semi-annually in cash at a rate of 2.25% per annum in arrears
on January 1 and July 1 of each year, beginning on January 1, 2019. The
Notes mature on July 1, 2023 unless redeemed, repurchased or converted
prior to such date according to the terms of the Notes. The Notes are
convertible into the Company’s American depositary shares (“ADSs”), each
representing one Class A ordinary share of the Company, based on an
initial conversion rate of 50.5165 of ADSs per US$1,000 principal amount
of Notes (which is equivalent to an initial conversion price of
approximately US$19.80 per ADS and represents an approximately 32.5%
conversion premium over the closing trading price of the Company’s ADSs
on June 13, 2018, which was US$14.94 per ADS). The conversion rate is
subject to certain customary adjustments upon occurrence of certain
events. Upon conversion, the Notes may be settled in ADSs, cash or a
combination of cash and ADSs, at the Company’s election. Sea may not
redeem the Notes prior to maturity except in the event of certain
changes in the tax laws of a relevant taxing jurisdiction. Holders of
the Notes have the right to require the Company to repurchase at par for
cash all or part of their Notes upon occurrence of certain events that
constitute a fundamental change under the indenture governing the Notes.

This press release does 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 does 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.

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 platforms 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, 2017 and other filings
with the Securities and Exchange Commission.

Contacts

Sea Limited
Investors / analysts:
Yong Cheng Ong
ir@seagroup.com
or
Media:
media@seagroup.com
or sea@brunswickgroup.com