Tencent Holdings in Talks For $2 Billion Loan

HONG KONG—Tencent Holdings Ltd. is in talks with banks to raise $2 billion in a syndicated loan, people familiar with the matter said, as the Chinese social network company seeks to raise funds for more acquisitions and expand into new areas such as financial services.

China's biggest Internet companies Tencent and online shopping firm Alibaba Group Holding Ltd. have been raising billions of dollars in bank loans over the past several months to finance their expansion through acquisitions in China and abroad. Tencent's discussions about the new loan come after the company in November secured $1.5 billion in a syndicated bank loan.

Last month, Alibaba said it had secured a $3 billion syndicated loan.

Tencent and Alibaba have been ramping up their investments in a wide range of businesses, from ride-sharing to online entertainment and financial services. In January, Tencent participated in a $3.3 billion investment round for Meituan-Dianping, China's biggest online provider of restaurant bookings, movie ticketing and other on-demand services.

Last week, people familiar with the matter told The Wall Street Journal that both Tencent and Alibaba are participating in a new $1.5 billion investment round for Beijing-based ride-sharing company Didi Kuaidi Joint Co., the biggest Chinese competitor to Uber Technologies Inc.

Earlier this week, Alibaba said it would invest about $1 billion for a controlling stake in Singapore-based online shopping startup Lazada Group.

Tencent's new loan, expected to close by next month, would likely help finance more acquisitions as well as the company's continued expansion in financial services, the people said.

The company, which last year started offering small personal loans to users of its WeChat messaging app, is also the largest shareholder of its online banking affiliate, WeBank.

WeBank competes with Alibaba's financial services affiliate, Ant Financial Services Group.

The five banks that were underwriters for Tencent's previous $1.5 billion loan in November—Citigroup Inc., Australia & New Zealand Banking Group, Bank of China, HSBC Holdings PLC and Mizuho Financial Group—will be underwriters again for the new $2 billion loan, the people said.

Write to Juro Osawa at [e-mail]

(END) Dow Jones Newswires

April 15, 2016 00:55 ET (04:55 GMT)

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