BEIJING, June 27 (TMTPOST)— The Hong Kong-listed shares of Tencent Holdings Ltd fell as much as over 4% at Monday midday, after the Chinese internet giant announced its largest shareholder to start selling shares to fund a buyback program.

Source: Visual China

South African multinational Naspers and Prosus NV, a Dutch technology investment company owned by Naspers, were going to sell Tencent shares orderly to fund a long-term open-ended share repurchase program of their shares, according to a statement on Monday. Naspers, which holds 28.78% stake in Tencent through Prosus, expected the on-market sale of Tencent shares would be just a fraction of the average daily traded volume of Tencent shares. For example, had Naspers and Prosus executed the repurchase program over the last three months within European regulatory limits, the Tencent Shares that would have been sold on a daily basis should be, on average, not more than approximately 3-5% of average daily traded volume.

Naspers and Prosus said the repurchase program would run as long as elevated levels of the trading discount to their underlying net asset value persist, but they added both of their boards had great confidence in Tencent’s long-term prospects.

This is Prosus’ another cut in stakes in less than two years. On April 27, 2021, the Amsterdam-listed company said it would sell up to 190 million Tencent shares and promised not to have further cut in at least three years. However, it ate its words and restarted the offloading more than a year after the previous transaction lowered its stake by 2% from 30.9%.

Prosus also announced that it had already had aggregate proceeds of about US$3.67bn through a disposal of 131,873,028 Class A ordinary shares of JD.com it received as a special interim dividend from Tencent in last December. During the disposal process, Prosus sold the JD shares through a number of separate on-market sales in an orderly manner over time.

Tencent’s Hong Kong shares settled almost 1.6% lower while shares in Naspers in Johannesburg and Prosus’s Netherland-listed shares surged 22.8% and 11.7% respectively Monday.