China’s Alibaba Group Holding Limited plans to raise at least $5 billion through the sale of a United States dollar-denominated bond this month, four people with knowledge of the matter told Reuters, amid regulatory scrutiny of co-founder Jack Ma’s empire.
Depending on investor response, proceeds could reach $8 billion which the e-commerce leader is likely to use for general corporate expenditure, one of the people said.
The fundraising will be a test of
investor sentiment towards Alibaba, coming months after an October
speech from billionaire Ma about regulation stifling innovation that led
to the halting of affiliate Ant Group’s $37 billion stock market
listing.
Ma’s absence from public view in the intervening time has fuelled social media speculation over his whereabouts.
The bond sale plan, including timeline, is not finalised and is subject to change, the people said, all of whom declined to be identified as they were not authorised to speak to the media.
Alibaba declined to comment.
Since Ma’s speech, Chinese regulators have begun an antitrust probe into
Alibaba and ordered fintech Ant to change its lending and other
consumer finance businesses, including the creation of a holding company
to meet capital requirements.
Regulators are also reviewing Ant’s equity investments in dozens of companies and considering whether to instruct the firm to divest of some, Reuters reported last month.
Alibaba’s international bond offering, if finalised, would be the group’s third, Refinitiv data showed. It sold an $8 billion U.S. dollar bond in 2014, and a $7 billion tranche in 2017, the data showed.
With its latest float, Alibaba will join a slew of Asian companies
that in recent months have taken advantage of cheaper borrowing costs
and abundant liquidity in global markets.
The terms of the offering were not immediately known. Two of the people
said marketing documents were likely to be available as soon as next
week, and that the tenure of the bond is likely to be 10 years.
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