China's AVIC, CITIC, others inject $850 million to fund Tencent's Supercell purchase

October 17, 2016 12:30 AM EDT

Tencent comany name is displayed at a news conference in Hong Kong, China March 17, 2016. REUTERS/Bobby Yip/File Photo

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HONG KONG (Reuters) - Tencent Holdings Ltd said a consortium formed to buy game developer Supercell has raised $850 million by selling new shares to investors including Chinese state-owned investment firms AVIC Capital and CITIC Capital.

Tencent, China's biggest gaming group agreed in June to buy the 'Clash of the Clans' mobile game maker from Japan's Softbank Group Corp for about $8.6 billion but had flagged it would form a consortium with co-investors.

After the share sale, co-investors, which also include China CITIC Bank Corp and bad debt manager China Cinda Asset Management, will own 50 percent of the consortium.

The cash raised from the new investors will be used to partly fund the Supercell acquisition, which Tencent now expects to complete on or around Oct. 27.

The deal is being mainly financed with bank loans.

Tencent has received commitments of over $1.8 billion from 12-13 banks for a $3.5 billion loan to fund the acquisition, Thomson Reuters publication IFR reported this month.

Following the acquisition, the consortium will indirectly hold 76.9 percent of Supercell.

(Reporting by Donny Kwok; Editing by Miyoung Kim and Edwina Gibbs)

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