HONG KONG: Alibaba Group Holding Limited (NYSE: BABA; HKEX: 9988, 89988) on Thursday unveiled plans for a HK$12 billion offering of zero coupon exchangeable bonds, linked to the ordinary shares of Alibaba Health Information Technology Limited (HKEX: 00241).
The private placement is aimed at certain non-U.S. investors under Regulation S of the U.S. Securities Act of 1933. Subject to market conditions, the bonds will mature on July 9, 2032, and will not carry regular interest. Holders may exchange the bonds for Alibaba Health shares, cash, or a combination thereof after the 41st day following issuance.
Alibaba Health, a consolidated subsidiary of the e-commerce giant with a 64% stake held by Alibaba Group, will remain a core healthcare platform under the company’s “AI + Healthcare” push.
Proceeds from the bond sale are earmarked for general corporate purposes, including investments in cloud infrastructure and Alibaba’s international commerce operations.
In connection with the bond pricing, Alibaba disclosed that certain investors may engage in hedging strategies, including short selling of Alibaba Health shares. A delta placement of AH Shares is expected through negotiated transactions, backed by a stock lending arrangement involving a wholly-owned Alibaba subsidiary and bookrunners.
The exchangeable bonds and related securities are not registered under U.S. securities laws and may only be sold to non-U.S. persons in offshore transactions.