Tencent announced on Tuesday it would cut its stake in Sea Ltd, the most valuable tech company in Southeast Asia, reducing its voting power to under 10%.
After Sea publicized a plan to boost the voting power of its B shares, Tencent looked to convert those B shares to A shares and end the proxy by which it gave its Class B voting power to Sea founder Forrest Li.
According to Reuters, Tencent will divest about 14.5 million shares at a price range of $208.00-$212.00 per share, reducing its stake to 18.7% from 21.3%. The total divestment to up to $3.1 billion.
The move, once complete, will lead to Forrest Li, the founder, chairman, and CEO of Sea, having around 57% of voting rights in the company, up from 52% currently.
The Chinese company said it intends to retain the substantial majority of its stake in Sea for the long term.
"The share sale unlocks a portion of the value of Tencent's investment in Sea, which has seen significant growth and expansion in its global business operations. The divestment provides Tencent with resources to fund other investments and social initiatives," the company said in a statement.
Tencent will be subject to a lockup period that restricts further sale of Sea shares by Tencent during the next six months.
Sea was established in 2009 and operates three core businesses - digital entertainment Garena, e-commerce Shopee, and digital payment SeaMoney-to serve the Southeast Asian market.
It marks Tencent's second withdrawal from an Internet company with a high market value in less than a month. Last month, the Chinese gaming and social giant said it will distribute approximately 457 million JD.com shares to its shareholders in the form of a special dividend, valued at more than $16 billion. The action will cut Tencent's shareholding in JD.com, the second-largest e-commerce platform in China, to 2.3% from 17%.