Tencent to reduce voting stake in Singapore tech group Sea,the latter fell nearly 5% in premarket trading

Sea fell nearly 5% in premarket trading.Chinese gaming and social media company Tencent Holdings Ltd has agreed to convert its Class B ordinary shares in Singapore-based gaming and e-commerce firm Sea Ltd into Class A ordinary shares, reducing its voting power to less than 10%.

In a statement issued on Wednesday, U.S.-listed Sea said Tencent and its affiliates, which together hold a 21.3% stake in the company, had given an irrevocable notice to convert its entire Class B ordinary shares.

Upon conversion, all outstanding class B shares of Sea will be beneficially owned by Forrest Li, the founder, chairman and CEO of Sea, whose market value of $124 billion makes it Southeast Asia's most valued company.

Tencent has also agreed to terminate its proxy to Li after the conversion.

Sea said the changes are subject to approval by its shareholders at its annual general meeting on Feb. 14.

It said that once the changes are made, the outstanding Class B ordinary shares beneficially owned by Li are expected to represent about 57% of the voting power, up from about 52%.

Separately, Li holds about 54% of the total voting power related to the size and composition of Sea's board of directors.