Alibaba set to raise up to $13.4bn in Hong Kong

Alibaba is set to raise up to $13.4bn in a secondary listing in Hong Kong In what would be the world’s biggest equity capital raising of the year so far.

The Chinese ecommerce company on Wednesday night kicked off a week-long roadshow in which it would seek to sell 500m shares to investors, according to a term sheet seen by the Financial Times.

Final pricing on the deal is set to be confirmed on November 20 with shares listing in Hong Kong on November 26 under the ticker 9988, the term sheet said.

Depending on demand, the company’s investment bankers have the option to sell an additional 15 per cent of shares to investors, in what is known as a green shoe.

The group, which listed on the New York Stock Exchange five years ago, had sought to take advantage of positive momentum following its annual Singles’ Day event on Monday, which saw shoppers spend a record $38bn.


Total capital raising on the Hong Kong exchange this year, down from $32bn in 2018

Alibaba originally filed for a Hong Kong listing in June and had hoped to raise up to $20bn before plans stalled amid deepening political unrest in the Chinese territory.

The share listing would also be a big win for the Hong Kong bourse, which has seen fundraising activity rebound since September following a quiet summer.

A series of $1bn-plus listings in the past few months have taken funds raised from listings this year to $21bn, according to Dealogic data — although that still trails the $32bn raised in Hong Kong in 2018.

Earlier on Wednesday, Alibaba issued a 660-page, heavily redacted document released via the Hong Kong stock exchange that contained few new public details on the secondary listing.

Alibaba said it planned to use the proceeds to fund the expansion of its online consumer services platforms including food delivery group, online travel company Fliggy and digital media platform Youku.

Alibaba would also continue to spend heavily in machine learning and cloud computing technology.

The company has already shown a willingness to invest in recent weeks, paying $3.3bn to increase its stake in logistics business Cainiao.

The Alibaba share sale comes as months of political unrest have hit equity market sentiment in the Asia finance hub, with violence increasing sharply in recent days.

Protests have crippled Hong Kong’s transport network this week, after a police officer shot an unarmed demonstrator and a man was set on fire by protesters after a confrontation. The benchmark Hang Seng index is down almost 4 per cent since Monday.

The Alibaba listing would be one of the world’s biggest fundraisings this year, outstripping the $8bn initial public offering of ride-hailing company Uber in New York in May.

It would also easily top the $5bn IPO of brewer Anheuser-Busch InBev’s Asia-Pacific unit in Hong Kong in September. 

Alibaba’s 2014 New York listing was the biggest IPO ever. Its secondary listing comes as Saudi Aramco prepares to list in Riyadh, aiming to surpass the $25bn raised by the Chinese company.

The lead sponsors are Credit Suisse and state-owned investment bank CICC.


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