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article imageSpotify solved a $1 billion debt issue that will aid with IPO

By Markos Papadatos     Jan 6, 2018 in Technology
Spotify wants to sell its shares to investors in the spring of 2018. In doing so, Spotify has cleaned up a debt deal thanks to the help of a Chinese tech conglomerate Tencent.
According to an article on the technology news website Recode, Dragoneer Investment Group, Goldman Sachs and TPG lent one billion dollars to Spotify, via convertible debt financing, and they turned some of that debut (and loans) into equity, which they subsequently sold to Tencent, the multinational investment holding conglomerate in China.
This complex transaction let Dragoneer Investment Group and TPG to earn a profit on their investment; moreover, it allowed the streaming service Spotify to solve a precarious business dispute before it tries its Initial Public Offering (IPO).
This deal allows Spotify to bide its time before an Initial Public Offering. The longer it would take for Spotify to go public, the better it would be for the lenders; however, the aforementioned Recode article also indicated that the company had confidentially filed documents for an Initial Public Offering in mid-December of 2017. This unusual version of an Initial Public Offering would allow the streaming service to save money on the banking fees.
More about Spotify, initial public offering, Ipo, Streaming
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