South Africa’s Naspers sells $10.6 billion worth of its stake in China’s Tencent

South African media company, Naspers Ltd. on Thursday announced that it would sell two percent of its shares in China’s Tencent Holdings worth $10.6 billion, in order to reinforce its balance sheet and to accelerate growth. This comes hours after Tencent announced that its revenue missed estimates and it warned that planned investments may hurt margins.

“This is a positive move from the company for investors. By doing this, Naspers will be able to reduce its borrowings, grow its own portfolio and slowly start reducing that underlying discount,” money manager Ron Klipin at Cratos Capital told Bloomberg.

According to the South African media company, this is the first time it is selling any Tencent shares since its investment in 2001. “The company considers Tencent to be one of the very best growth enterprises in any industry in the world, managed by an exceptionally able team. Tencent understands and supports the intention to sell.”

In 2001, Naspers invested $32 million in Tencent, which was then a little-known Chinese startup but now the investment is worth $175 billion with Naspers having a market value of about $125.5 billion. The South African company is expected to use the money from the sale of Tencent shares to invest in its classifieds, online food delivery and fintech businesses and make other investments. The sale of the 190 million shares will cut the stake held by Naspers to 31.2 percent from 33.2 percent.

Investment bankers at Bank of America Merrill Lynch, Citigroup, and Morgan Stanley are offering the shares to institutional investors. The sale should close before the Hong Kong market opens on Friday, Naspers told Bloomberg.