Asia Business-China Alibaba Group Holding plans to raise at least $5 billion in regulatory scrutiny of co-founder Jack Ma’s empire.
The raise could reach $8 billion and it is likely to use for general corporate expenditure.
Asia Business-Test Investor Sentiment
The fundraising will be a test of investor sentiment towards Alibaba.
Besides, Chinese officials have come down hard on Ma’s business empire since he publicly criticized the country’s regulatory system in October.
It also set off a chain of events. Hence, it causes the halting of Ant Group’s $37 billion stock market listing.
Asia Business-The antitrust probe
Since Ma’s speech, Chinese regulators have begun an antitrust probe into Alibaba. Furthermore, they also order fintech Ant to change its lending and other consumer finance businesses.
For example, it consists of the creation of a holding company to meet capital requirements.
Banning from the US
U.S. President Donald Trump has also wanted to ban transactions with eight Chinese software applications, including Ant Group’s Alipay mobile payment app.
Chinese regulators are also reviewing Ant’s equity investments in dozens of companies and considering whether to instruct the firm to divest some of those investments.
Apart from that, Investors will need Jack Ma to make some sort of public appearance to give them confidence for the bond to be well received,
This is because Alibaba’s current situation needs to price it at a premium, and in the long term, Alibaba is still a company worth investing in.
Alibaba’s Hong Kong-listed shares rose as much as 4% on Wednesday, versus a 0.4% decline in the benchmark index. The stock’s price had fallen 5.6% over the last three sessions.
Last month, Alibaba said it would increase the value of a share repurchase programme to $10 billion from $6 billion.
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