Alibaba Group Holding Ltd. may borrow as much as $2 billion from China Development Bank Corp. and another $2 billion from a syndicate of international lenders, according to two people familiar with the matter.
Alibaba Group plans to seek $2 billion from CDB in three- and four-year loans, divided equally, the people said, asking not to be identified because the details are private. It may also borrow $1 billion each in three- and four-year facilities from a syndicate of international banks, the people said.
John Spelich, a Hong Kong-based spokesman for Alibaba, declined to comment on the financing. Feng Qihua, a Beijing- based spokeswoman for CDB, didn’t immediately respond to a request for comment.
China’s largest e-commerce provider is seeking the $4 billion of debt to fund an about $7.1 billion buyback of a portion of the stake that Yahoo! Inc. (YHOO) owns in it, another person familiar with the matter said on May 21. Yahoo acquired 40 percent of Alibaba in 2005 in exchange for $1 billion and ownership of the U.S. Web portal’s Chinese operations.
Alibaba agreed to repurchase about half of the U.S. company’s stake, Yahoo said in a statement on May 21. As well as at least $6.3 billion in cash, Yahoo will receive as much as $800 million in newly-issued Alibaba preferred stock, according to the statement.
The final commitment sizes, bank group and structure of the $4 billion borrowing has not yet been determined, the people said today. The loan debt, which was originally meant to be $3 billion in size and provided by international lenders, is now being restructured as a $4 billion facility, they said.
The money will also help fund the privatization of Hong Kong-listed Alibaba.com Ltd. (1688), the person who spoke on May 21 said. Alibaba Group offered HK$13.50 ($1.74) a share for the 27 percent it doesn’t already own in Alibaba.com, according to a Feb. 21 statement to the Hong Kong Stock Exchange .
Australia & New Zealand Banking Group Ltd. (ANZ), Credit Suisse Group AG, DBS Bank Ltd., Deutsche Bank AG, HSBC Holdings Plc and Mizuho Corporate Bank Ltd. underwrote the original $3 billion financing that’s now being restructured. The $3 billion facility was syndicated to an additional about 14 banks, another person said on May 2.
To contact the reporter on this story: Wendy Mock in Hong Kong at email@example.com