TikTok owner ByteDance’s overseas operations to get boost from US$9.5 billion bank loan

The company’s overseas e-commerce operation, for example, is still in an ‘input phase’ to build up its ecosystem, according to analyst Li Chengdong

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TikTok owner ByteDance is keeping details of its reported US$9.5 billion bank loan close to the chest. Photo: Shutterstock

Published: 7:11pm, 3 Sep 2024

The overseas operations of social media giant ByteDance, owner of hit short video platforms TikTok and Douyin, are expected to receive a boost from its reported plan to borrow US$9.5 billion from banks.

That loan would represent the biggest dollar-denominated corporate facility in Asia, excluding Japan, according to separate reports earlier this week by Bloomberg and Reuters, both of which cited sources familiar with the matter.

ByteDance needs some of the proceeds from the US dollar-denominated loan for its overseas businesses, according to Li Chengdong, founder and chief analyst at Beijing-based consultancy Dolphin.

The company’s overseas e-commerce operation, for example, is still in an “input phase” that requires hundreds of millions of dollars to build up its ecosystem, Li said. The loan can also help “maintain [good] connection with the banks”, he added.

ByteDance’s overseas e-commerce business, TikTok Shop, was initially rolled out in the UK and Indonesia in 2021. Photo: Shutterstock

“It is also common practice for Chinese tech giants, including the likes of Tencent Holdings and JD.com, to issue bonds overseas because foreign currency exchange can be difficult,” Li said.

Citigroup, Goldman Sachs and JPMorgan are the coordinators of the latest financing, which carries a tenor of three years and can be extended to a maturity of up to five years, the Bloomberg report said. The proceeds will be partly used to refinance a US$5 billion dual-tranche facility the group had raised in 2021 and for working-capital purposes, according to the report.