ByteDance Ltd, the Chinese parent company of TikTok, is preparing to finalize a loan worth $10.8 billion (RM44.7 billion), which would mark the largest dollar-denominated corporate facility in Asia, excluding Japan. This deal will be funded by around 20 lenders, including both international and Chinese banks, as reported by sources who wished to remain anonymous due to the confidential nature of the negotiations.
The financing comes at a tumultuous time for Beijing-based ByteDance. The company is under intensifying scrutiny in the US and faces calls to sell TikTok, while at home it’s playing catchup in the artificial intelligence (AI) race. Even so, the loan is oversubscribed and has increased from the initial target size of US$9.5 billion — an indication that lenders are still eager to extend credit despite the headwinds.
Citigroup, Goldman Sachs and JPMorgan were the coordinators of the latest financing, which carries a tenure of three years and can be extended to a maturity of up to five years. Proceeds of the deal will be partly used to refinance an existing US$5 billion dual-tranche facility the group had raised in 2021.
Founded in 2012, ByteDance has emerged as one of the world's leading social media companies, capitalizing on its extensive audience in China through the popular app Douyin to branch into new sectors like e-commerce. On the international front, TikTok is set to expand its live shopping platform into more European markets following its initial success in the United States. Additionally, the company's significant venture into generative AI and the creation of large language models for applications similar to ChatGPT is a capital-intensive endeavor that requires billions in upfront investment.