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ByteDance Eyes $9.5 Billion in Asia's Largest Dollar Corporate Loan

ByteDance Closes Asia’s Largest Dollar-Denominated Corporate Deal, Securing $9.5 Billion Loan

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The massive $9.5 billion loan secured by ByteDance, the Chinese internet giant that owns TikTok, is creating waves. This is the largest dollar-denominated commercial loan ever made in Asia outside of Japan. This action highlights ByteDance’s expanding power and its calculated attempts to take advantage of the region’s highly liquid loan market.

Details and Objective of Loan

ByteDance Eyes $9.5 Billion in Asia's Largest Dollar Corporate Loan

Image Source: freemalaysiatoday.com

The loan has a three-year term with a five-year option, arranged by financial behemoths Citigroup, Goldman Sachs, along JPMorgan. The huge magnitude of this loan more than double what was first projected reflects ByteDance’s intention to take advantage of the liquid lending market in Asia, where transaction volume has decreased this year.

ByteDance plans to refinance a $5 billion facility it raised in 2021 with the proceeds of the loan. The money that is left over will help the business meet its working capital requirements as it grows its international activities. Interestingly, the loan has a greenshoe option that lets you borrow more money than the initial $9.5 billion if needed.

Strategic Importance and Market Context

The loan from ByteDance coincides with a 44% decline in dollar loan volumes in Asia, excluding Japan, to roughly $45.5 billion in the first half of the year the lowest amount since 2010. By obtaining this loan, ByteDance not only establishes a new standard for the area but also demonstrates its sound financial standing and strategic vision in an environment of volatile markets.

Founded in Beijing in 2012, ByteDance has swiftly become one of China’s leading online social networking platforms, largely due to the popularity of its mobile video app Douyin, which is extensively utilized, and its foreign version TikTok. ByteDance is prepared to diversify company operations with this additional funding further, venturing into e-commerce, generative AI, and online advertising. Additionally, the business is making significant investments in research and development, especially in the areas of big language models and AI-powered apps.

Also Read: South Korea Urges Telegram to Crack Down on Deepfake Sex Crimes

International Goals and Upcoming Projects

ByteDance is concentrated on expanding TikTok’s footprint abroad, especially in the e-commerce industry. TikTok intends to introduce its live shopping platform into more European regions after seeing success with it in the United States. This will establish ByteDance as a significant player in the global digital economy.

In summary, ByteDance’s $9.5 billion loan is a strategic decision that will support the company’s ongoing expansion and innovation, both in China and internationally, in addition to being a significant financial achievement.

ByteDance the TikTok Owner Company Working to Bring its Series of Smartphones

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The smartphone market is full of tech companies, that are constantly working to bring better options for their users. With the rise of various Chinese smartphone manufacturing companies, including Vivo, Oppo, Xiomi, the competition has also become tougher. Meanwhile, another Chinese tech giant, and the parent company of the famous video sharing app TikTok, ByteDance, is also planning to try its hands in smartphone manufacturing.

ByteDance smartphone
Image Source: rollingstone.com

ByteDance
is one of the most successful Internet technology company from China,
founded in 2012 by tech entrepreneur Zhang Yiming. The company gets
credit for many famous apps, including TikTok, Musical.ly, TopBuzz,
Toutiao, etc.

There has been the latest trend for app makers to manufacture smartphones having in-built famous apps, the partnership of Meitu and Xiomi being the biggest example. This way, it becomes easy for the app makers to attract their app audience towards buying their home production smartphones. In a similar way, ByteDance may also bring a new smartphone that might have all its famous apps, including TikTok and even its unreleased music streaming app.

The news was first reported by Financial Times, citing two unnamed sources, but the company has still not given any comments on the news. In the January month this year, ByteDance joined hands with the smartphone manufacturing company Smartisan, which confirms it all. In fact, the company acquired a patent portfolio and even hired a few employees to work with from Smartisan. While after the deal, ByteDance said that the deal was to “explore the education business”, there are no chances that any of the two companies have ever worked in the field of education.

According to the news, it was a long time dream for Zhang Yiming to build a smartphone preloaded with ByteDance apps, but since we have already seen the cases with tech giants like Facebook and Amazon, it is difficult to say that this is a good idea for ByteDance. Though ByteDance’s apps are popular, people are already using apps by downloading them through app stores. The report from FT does not give any indication on the price, design or release date of the smartphone.

Additionally,
ByteDance has been facing issues with the operations of its TikTok
app, as it had faced a temporary ban in India. Also in the U.S., the
Chinese companies are already struggling for their position. So,
being a Chinese company, it may be difficult for ByteCode to expand
its smartphone service in the U.S. too.