TENCENT Holdings Ltd. is in talks with banks to raise at least US$2 billion in a syndicated loan, said sources involved in the financing, as the Shenzhen-based social network company seeks to raise funds for more acquisitions and expand into new areas such as financial services.

    The plan adds to a US$2.45 billion loan that Tencent, best known for its WeChat mobile app, closed in December, said the sources.

    China’s major Internet companies Tencent and Alibaba Group Holding Ltd. have been raising billions of dollars in bank loans over the past several months to finance their expansion through acquisitions in China and abroad. Last month, Alibaba said it had secured a US$3 billion syndicated loan.

    Tencent and Alibaba have been ramping up their investments in a wide range of businesses, from ride-sharing to online entertainment and financial services. In January, Tencent participated in a US$3.3 billion investment round for Meituan-Dianping, China’s biggest online provider of restaurant bookings, movie ticketing and other on-demand services.

    The sources said Tencent was seeking a bullet loan of between US$1.5 billion and US$2 billion for general corporate purposes. In a bullet loan, the principal is repaid at the end of the term.

    They added that it is expected to use the same group of banks as the previous loan — ANZ, Bank of China (Hong Kong), Citigroup, HSBC and Mizuho Bank — which were the mandated lead arrangers and bookrunners. The previous loan attracted 14 other lenders.

    Tencent’s new loan, expected to close by next month, would likely help finance more acquisitions as well as the company’s continued expansion in financial services, the sources said.

    Tencent’s net cash fell from 22.8 billion yuan at the end of 2014 to 19.1 billion yuan at the end of 2015. During the same period, capital expenditure leaped by almost two-thirds to 7.7 billion yuan. (SD-Agencies)