Alibaba Group Holding Ltd. plans to raise a whopping $ 8 billion next week from dollar bond sales, according to people familiar with the case.
The e-commerce giant is aiming to raise at least $ 5 billion, but may make more depending on reception, the people who are not authorized to speak in public said, asking not to be identified. The deal becomes one multi-installment offering, with specific tenors yet to be determined, they said. Alibaba declined to comment. Reuters previously reported the planned sale.
A halt to the sale at a time when Jack Ma’s empire is facing intense government pressure would be a sign of investor confidence in the company worldwide. In recent months, officials have announced the IPO of Ant Group Co. $ 35 billion blocked, new rules proposed to curb Internet giants’ dominance and has fined Alibaba for takeovers from years before. Further investigation of mergers and acquisitions can lead to uncertainty about the growth of large internet companies.
“We view the issue as somewhat exploratory given the broader uncertainty surrounding Ant / Jack Ma,” said Chuanyi Zhou, a credit analyst with Lucror Analytics in Singapore. “It could reveal just how seriously global investors view the rapidly evolving regulatory environment in China and the potential impact on Alibaba.”
Alibaba raised about $ 11 billion from the sale of Hong Kong shares at the end of 2019 and had a cash inventory of nearly $ 90 billion at the end of September.
The sale is because companies issue bonds en masse. Borrowers have sold more than $ 65 billion dollars in bonds worldwide so far this year, after a record of more than $ 3.6 trillion in 2020, according to data collected by Bloomberg.
The firm first tapped the global debt market in 2014 to raise $ 8 billion shortly after the stock’s historic debut in New York. It last hit the offshore market with a $ 7 billion bumper deal in 2017 and must repay or refinance about $ 1.5 billion in debt due this year, Bloomberg data collected.
Great sellers
China’s largest dollar bond deals sold in the past decade
Source: Bloomberg
Alibaba’s dollar bond due 2027 trades at about 111 cents a dollar, Bloomberg compounded prices show.
Alibaba has spent billions in recent years acquiring stakes in promising startups, expanding its logistics network and cloud hosting services, and building an international business through Singapore-based online shopping center Lazada. It is now engaged in a blood-curdling battle with Meituan on food delivery, while rivals such as JD.com Inc. and Tencent Holdings Ltd. in businesses from groceries to retail stores.
– With the help of Adrian Yim, Coco Liu and Edwin Chan