According to Reuters, the Alibaba Group is planning to privatise its Hong Kong-listed B2B subsidiary, Alibaba.com. The Chinese e-commerce giant is in the process of securing a loan worth US$3 billion from six major banks. Alibaba will use a combination of loans and internal cash as well as an asset swap to buy back a portion of the 40% stake owned by majority shareholder, Yahoo Inc.
The loans from the six banks involved, namely, Australia and New Zealand Banking Group, Credit Suisse Group, DBS Bank, Deutsche Bank, HSBC Holdings and Mizuho Financial Group, have a reported tenor of three years with approximately a 4% yield.
Alibaba.com was suspended from trading on the Hong Kong Stock Exchange (HKEx) yesterday at the request of the company citing “a transaction involving the controlling shareholder of the Company” as the reason. Yahoo’s stake in the Alibaba Group is estimated at around US$14 billion. Alibaba is reportedly aiming to buy back 25% of Yahoo’s overall stake. Alibaba will use a stake in Alibaba.com to cover a third of the deal value and the rest through loaned cash.
Source: Business Strategies Group (www.bsgasia.com)