Telegram to Raise $1.5B to Repay 2021 Debt

Telegram, the crypto-friendly social platform, is set to raise $1.5 billion through a new bond issuance. This offering is designed to repay debt incurred in 2021, which is scheduled to mature in March 2026. Previously, the company repurchased approximately $400 million of those bonds using cash.

Support from Institutional Investors

The messaging app plans to issue $1.5 billion in five-year bonds at a 9% yield. Notably, it comes with a convertible clause that allows bondholders to exchange their investment for Telegram equity at a discount if the company goes public.

The firm’s move to raise this fund has received support from institutional investors. They include asset manager BlackRock and Abu Dhabi’s state-owned investment company, Mubadala. Other investors, such as hedge-fund firm Citadel, are expected to participate.

According to sources close to the matter, the new bonds’ convertibility feature may serve as a bridge to a future Initial Public Offering (IPO). However, the possibility of this seems far-fetched due to Telegram’s CEO, Pavel Durov’s legal struggle, and market volatility.

Telegram Growth Despite CEO’s Regulatory Woes

Durov has been in France following his arrest last August. Although he has been released on bail, he is still barred from leaving the country without permission while the investigation is ongoing. 

Currently, it remains unclear how long Durov will be stuck in France. This is because preliminary charges initiate a lengthy investigation by investigating magistrates in the French system. These magistrates will then decide whether to proceed to trial or dismiss the charges.

“We complied with all the binding legal requests we received. So up until this day, we don’t understand what we did wrong,” Durov said.

Despite the legal struggle, Telegram has continued growing. In March, Durov announced that the app had reached 1 billion active users each month. Recently, he shared that the app had more than 15 million paid subscribers, doubling in the past year.

Furthermore, the messaging platform is reportedly projected to generate a profit of roughly $540 million in 2024, based on revenue of $1.4 billion. This figure is significantly higher than the revenue of 2023. For this year, Telegram is projecting a profit of more than $700 million on revenue of $2 billion.

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