Bulletin: Tencent Holdings Ltd. Rating Unaffected By Proposed Strategic Investment In Supercell

HONG KONG (S&P Global Ratings) June 23, 2016--S&P Global Ratings said today that its ratings on Tencent Holdings Ltd. (Tencent: A/Positive/--; cnAAA/--) are unaffected by the company's proposed investment in Supercell Oy, a Finland-based mobile game developer. We expect only a mild increase in Tencent's leverage (as represented by the ratio of debt to EBITDA) following the acquisition. Tencent is in discussions with potential co-investors to form the consortium under a special purpose vehicle for the acquisition. The buyer group proposes to acquire up to 84.3% stake in Supercell for US$8.6 billion. We expect the transaction to be completed by the end of 2016. After that, Supercell will be classified as an investment rather than a consolidated subsidiary of Tencent.

...HONG KONG (S&P Global Ratings) June 23, 2016--S&P Global Ratings said today that its ratings on Tencent Holdings Ltd. (Tencent: A/Positive/--; cnAAA/--) are unaffected by the company's proposed investment in Supercell Oy, a Finland-based mobile game developer. We expect only a mild increase in Tencent's leverage (as represented by the ratio of debt to EBITDA) following the acquisition. Tencent is in discussions with potential co-investors to form the consortium under a special purpose vehicle for the acquisition. The buyer group proposes to acquire up to 84.3% stake in Supercell for US$8.6 billion. We expect the transaction to be completed by the end of 2016. After that, Supercell will be classified as an investment rather than a consolidated subsidiary of Tencent. We estimate that Tencent will contribute US$3.0 billion-US$4.0 billion (Chinese renminbi [RMB] 20 billion¡RMB26 billion) in this transaction. We expect the company to fund the investment with its cash on hand and undrawn committed...

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