According to a term sheet, Chinese gaming and social media company Tencent Holdings Ltd generated $3 billion by selling 14.5 million shares at $208 apiece in Sea, which owns e-commerce startup Shopee.

Tencent announced late Tuesday that it has reached an agreement to cut its share in the Singapore-based gaming and e-commerce company to 18.7% from 21.3 percent. For the foreseeable future, the business intends to keep a significant portion of its ownership in Sea.

Tencent announced last month that it would sell a $16.4 billion investment in, diminishing its connections to China’s second-largest e-commerce company, in response to Beijing’s wide regulatory crackdown on tech companies.

Following the news of the spinoff, Sea’s stock dropped 11.4 percent to $197.8 in New York on Tuesday. Tencent had also agreed to reduce its voting stake in the company to less than 10%, Sea stated ahead of the announcement.

“We believe with a lower voting right control, it could reduce any potential conflict if Tencent`s gaming teams plan to publish more games directly in global markets and help reduce any potential geopolitical friction if/when Sea plans to expand more strategically into new markets in more countries,” Citi`s analysts said in a report on Wednesday.

Tencent and its subsidiaries, according to Sea, have submitted an irrevocable notice to convert all of their Class B ordinary shares.

Upon conversion, Forrest Li, the founder, chairman, and CEO of Sea, Southeast Asia’s most valuable corporation with a market capitalization of $110 billion, will be the beneficial owner of all outstanding class B shares of Sea.

Tencent and Sea both declined to comment on the share sale’s price.

Sea’s stock has dropped 47% after hitting a record high of $372 in October, but it has still increased five-fold in the last three years.

In 2009, the company began as a gaming company, then expanded into e-commerce and food delivery, capitalising on a surge in consumer demand for its services, particularly during pandemic-related limitations.

Sea is now expanding its e-commerce operations globally.

“The divestment provides Tencent with resources to fund other investments and social initiatives,” Tencent said in a statement.

When the transaction was initiated on Tuesday, it sold the stock at the lower end of the $208-$212 per share range. The price was established at a 6.8% discount to Sea’s Monday closing price of $223.3.

Tencent’s stock dropped 3.5 percent in a broader market pulled down by tech firms on Wednesday.

Tencent will be subject to a six-month lockup term that prevents the company from selling more Sea shares.

Sea is also seeking to enhance the voting power of each Class B ordinary share from three to fifteen votes.

“The board feels that, given Sea’s tremendous growth to become a top worldwide consumer internet firm, it is in the company’s best interests to better define its capital structure through the anticipated modifications,” the company said.

Sea said the changes are subject to approval by its shareholders.

It is projected that once the modifications are finalised, Li’s beneficially owned Class B ordinary shares will comprise roughly 57 percent of the voting power, up from about 52 percent now.

Separately, Li controls around 54% of the entire voting power over Sea’s board of directors’ size and composition.