South African firm Naspers has announced its intention to sell off as many as 190 million Tencent Holdings Limited shares.
While that figure sure sounds impressive it actually only represents about 2 percent of Tencent’s issued share capital. The sale would drop Naspers’ ownership of Tencent shares from 33.2 percent to 31.2 percent.
So why is Africa’s biggest corporation selling its shares in one of China’s biggest tech firms? As Naspers explains, it wants to redirect funds to other investments.
“The funds will be used to reinforce Naspers’ balance sheet and will be invested over time to accelerate the growth of Naspers’ classifieds, online food delivery and fintech businesses globally,” Naspers said in a statement.
Naspers has investments in a number of well known companies including Takealot, OLX and cryptocurrency exchange Luno.
The firm added that it will also use the funds from the Tencent sale to pursue “exciting growth opportunities when they arise” and that it will not be selling further Tencent shares for at least the next three years.
According to a report by Forbes this sale has an estimated value of $545 billion.
Naspers investors have been advised that if the sale goes through successfully it may have a material effect on the price of the firms shares.
“Accordingly, Naspers shareholders are advised to exercise caution when dealing in Naspers’ securities until a further announcement is made,” the firm said.