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Alibaba plans to borrow at least $ 5 billion to implement expansion plans
Since the beginning of November, when the actions of the Chinese authorities derailed Ant Group’s public offering, the capitalization of the parent company Alibaba has decreased by almost a quarter. Antitrust Investigation Threatens Chinese Giant With Restructuring. Alibaba will have to resort to a bond issue of between $ 5 billion and $ 8 billion to finance its operations.
Image source: Reuters
This is reported by the Nikkei Asian Review with reference to knowledgeable sources. This will be only the third dollar bond placement in Alibaba’s history. The first took place in 2021 shortly after the public offering of shares, it raised $ 8 billion. Three years later, Alibaba raised $ 7 billion through bond placement. Investors then placed bets in the amount of about $ 45 billion, which allowed Alibaba to receive borrowed funds at a lower interest rate than originally planned.
Alibaba expects to raise $ 5 billion to $ 8 billion in bond placement this year. The funds will be used to pay off short-term debt obligations and finance business expansion. By the end of November of this year, Alibaba must return about $ 1.5 billion to creditors, as of the end of September last year it had highly liquid assets and cash equivalents in the amount of $ 60 billion, but these funds may not be enough to implement the plans, so they will have to resort to borrowing.