Bloomberg News

Alibaba Said to Get Part One of China Development Bank Loan

June 20, 2012

Alibaba Group Holding Ltd. is getting about $1 billion in a loan from China Development Bank Corp. to help finance the privatization of its Hong Kong-listed unit, which said it would delist today, two people familiar with the matter said.

The three-year loan of about $1 billion from China Development Bank is the first portion of a two-part financing package provided by the Chinese lender, the people said, asking not to be identified because the details are private. The size of the second portion of the loan from CDB hasn’t been determined and may have a tenor of four years, the people said.

John Spelich, a Hong Kong-based spokesman for Alibaba, declined to comment when asked about the financing today by phone.

The financing from CDB replaces a bridge loan provided by a syndicate of international lenders, the people said. Alibaba signed a $3 billion loan with a syndicate of 19 banks on June 12, two other people familiar with the matter said at the time. That loan is split into a $2 billion bridge loan and a $1 billion three-year term loan.

Alibaba bid HK$13.50 ($1.74) a share for the 27 percent of Alibaba.com Ltd. (1688) it doesn’t already own, according to a Feb. 21 Hong Kong Stock Exchange statement. Alibaba.com was to withdrew the listing of its shares at 4 p.m. Hong Kong time, according to an exchange filing earlier today.

Some of the money that Alibaba is borrowing from the syndicate of international lenders and CDB will also be used to help finance a buyback of an about 20 percent stake of Alibaba owned by Yahoo! Inc., according to one of the people who spoke today.

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


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