Telegram, which has become one of the world’s most downloaded chatting apps with over 500 million users revealed is planning on placing bonds worth $ 1 billion among select investors.
According to reports, Telegram Group Inc. plans to raise at least $ 1 billion through the placement of bonds among a limited circle of investors from Russia, Europe, Asia, and the Middle East.
This news means that if Telegram decides to go IPO within the next five years, its bondholders will be able to convert debt into shares at a 10% discount to the offering price. The money will be picked up by Telegram through convertible bonds securities and will not be placed on the exchange, according to sources.
Telegram messenger, which was developed by Russian-born software icon Pavel Durov, is looking to raise $1bn through a bond placement to a limited number of investors in order to enable it to expand its services further and make improvements in infrastructure.
It has been reported that the minimum bond placement has been set at $50mn, but could be lowered to $10mn. Five-year bonds could carry an annual coupon of 7-8%.
In Russia, potential investors have received offers to buy bonds from VTB and Aton, which are the financial agents for the Russian market, reports Kommersant. However, none of the two financial markets has responded to the claims and has remained silent about the matter.
If you have $50 million saved up somewhere, then this would be the perfect chance for you to jump onto the offer before it gets too circulated.
The reason behind this move is because Telegram needs funds to improve the infrastructure due to the constant influx of users. According to Sensor Tower, the messenger has become the most downloaded non-gaming application in the world. Its audience at that time exceeded 500 million users, said the founder of Telegram, Pavel Durov.
Telegram hopes to raise $1bn with a convertible bond private placement
Durov has already raised $1.7bn from the biggest ICO (Initial Coin Offering) in history to fund the development of his Telegram Open Network (TON) blockchain, but he later abandoned the project due to objections by the Securities and Exchange Commission (SEC), which said the sale of its GRAM coins was the sale of unregulated security reports bne IntelliNews.
This forced Durov to take different measures after the SEC ordered him to return $1.2bn of the $1.7bn he raised in the ICO by April this year, which is no surprise that the founder was already in talks with potential investors to raise fresh capital investment debt.
Meanwhile, various investors are interested in getting their hands on Telegram’s equity given the fact that tech stocks have been a hot topic this year within the last six months and Durov sees a future ahead to take his messaging to the top as an IPO.
Aside from that, Telegram is also one of the few companies that still remains 100% privately owned. At the moment, the service doesn’t make any money at all and is being privately funded by Durov and the capital he has raised so far.
Analysts surveyed by Kommersant believe that raising funds through an IPO would not be beneficial at this stage, as Telegram could monetise its services and improve on the $30bn that market participants currently estimate it is worth.
Telegram has definitely become a popular messaging service that is trusted by many, including those fighting for democracy and launching protests around the world such as Hong Kong, Tehran, Minsk and Moscow.
Its popularity has gotten further too because its privately owned and the founder, Durov himself has promised its users that it won’t co-operate with governments’ security services and given his lack of contact with Big Tech corporates, it has created a bond of trust between him and his users.
Millions of users flocked to the service after WhatsApp made a grave mistake in Jan early this year with its terms of service after it stated it would share its users’ data with its parent company Facebook. Within hours, over 25 million users migrated to Telegram after the reports about WhatsApp’s terms of service started to circulate.
Author: Allan Bangirana
Allan Bangirana has a taste for all kinds of topics and usually writes about tech, entertainment, sports and community projects that make a difference in society.