TikTok Parent ByteDance Seeks $9.5bn In Loans

Matthew Broersma,
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Image credit: ByteDance

TikTok parent ByteDance seeks landmark $9.5bn in bank loans to refinance existing facility and fund operating expenses amidst expansion

TikTok parent ByteDance is seeking a $9.5 billion (£7.23bn) loan from multiple banks that would be the largest dollar-denominated corporate facility in Asia outside of Japan.

Citigroup, Goldman Sachs and JPMorgan facilitating the financing, which carries a tenor of three years and can be extended to a maturity of up to five years, Bloomberg reported.

The loan is larger than earlier anticipated, indicating ByteDance is taking advantage of liquidity in Asia’s sluggish loan market.

Dollar loan volume in the first half of the year fell 44 percent across Asia excluding Japan, to its lowest level since 2010, according to Bloomberg data.

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Liquidity

The funds would be used partly to refinance an existing $5bn dual-tranche facility from 2021 as well as for working capital purposes, the report said.

ByteDance operates both TikTok outside of China and the similar Douyin app domestically, both of which have surged to become amongst the most-used social media apps worldwide.

The company is currently seeking to expand beyond its core online advertising business model into areas such as e-commerce and generative AI.

Domestically, the firm is one of a number of tech giants that have invested billions of dollars into research and development of large language models to create ChatGPT-style apps.

Subsidiary TikTok is planning to roll out its live shopping platform in European markets after finding success in the US.

At the same time TikTok faces political headwinds in the US in an election year, with a law passed in April that would seek to force ByteDance to divest the company by January or face a ban.

Market challenges

The US Department of Justice said in June it was preparing a separate lawsuit against TikTok over child privacy issues.

In July ByteDance lost a court challenge against being designated as a “gatekeeper” under the EU’s Digital Markets Act (DMA) rules, which came into force in August 2023, meaning it faces more stringent regulation in the bloc.

The EU has so far designated 22 services owned by Apple, Google, Microsoft, Amazon, Facebook parent Meta Platforms and TikTok owner ByteDance as gatekeepers.