Bloomberg News

Alibaba Said to Seek Up to $2 Billion From CDB for Yahoo Buy

May 22, 2012

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:US) 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.

Alibaba.com

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 wmock3@bloomberg.net

To contact the editor responsible for this story: Shelley Smith at ssmith118@bloomberg.net


China's Killer Profits
LIMITED-TIME OFFER SUBSCRIBE NOW

Companies Mentioned

  • YHOO
    (Yahoo! Inc)
    • $50.12 USD
    • 1.27
    • 2.53%
Market data is delayed at least 15 minutes.
 
blog comments powered by Disqus