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Giant Interactive Seeks $145 Million Bank Loan to Fund Takeover

By Shi Rui and Han Wei / Jul 26, 2019 04:32 AM / Business & Tech

Photo: VCG

Photo: VCG

Chinese online game developer Giant Interactive Group said it is seeking a credit line of 1 billion yuan ($145 million) from China Minsheng Bank following its latest effort to complete an acquisition of Israeli game studio Playtika.

Giant Interactive said the one-year loan would be issued at the market rate, currently around 4.785%. The final rate will be set the day the loan is extended. Giant Interactive made the disclosure as its Chairman Shi Yuzhu is also a non-executive director of Minsheng Bank, making the deal a connected-party transaction, the company said.

Giant Interactive said the fund will support its business operation, and the company is expected to borrow more “in a relatively long period.”

The loan application came one week after Giant Interactive proposed to China’s securities regulator to revise terms of its long-stalled acquisition of Herzliya-based social casino game company Playtika

The revision will include Giant Interactive buying Playtika stakes from its previous acquisition partners and increasing Playtika’s valuation from 30.5 billion yuan to 42.5 billion yuan.

The adjustment will require Giant Interactive to pay at least 26.8 billion yuan in cash, Caixin learned. The company said in its recent financial report that it had cash holdings of 5.1 billion yuan at the end of March.

Giant Interactive formed a consortium named Alpha with six Chinese equity funds to acquire Playtika for $4.4 billion in 2016 from Caesars Interactive Entertainment Inc. as part of its plan to inject Playtika assets into its listed arm. But the second phase of the acquisition, in which Giant Interactive’s listed unit would take over Alpha, stalled because of regulators’ concerns about the company’s financials and Playtika’s gambling-linked business. Giant Interactive has since made several revisions to its acquisition plan.

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