Alibaba Group Holding Ltd. is planning to raise around $20 billion through a secondary listing in Hong Kong, reported Reuters. This deal would be the sixth biggest follow-on share ever.
The Chinese e-commerce company, which raised a record $25 billion in New York in 2014, is expected to complete the Hong Kong listing later this year. The company plans to file an application confidentially in Hong Kong, the details of which, including the planned size, are not clear yet.
As Alibaba's growth has reportedly slowed compared to its peak in early 2017, this move was designed to diversify funding resources and comes in the light of China and US trade war, which pushed the Chinese technology companies towards domestic supply chains and funding.
This listing in Hong Kong will reportedly give mainland investors their first direct access to Alibaba via the stock connect trading link between Hong Kong, Shanghai and Shenzhen.
This float will be seen as a victory in Hong Kong, as the borrowing rates in the city are said to rise, strengthening the local dollar. As a part of a broader reorganisation of the city's listing regime, Hong Kong had last year amended its rules to make it easier for "innovative companies" listed in New York or London to carry out a secondary listing in Hong Kong.
No company has used these rules to raise the second listing in Hong Kong so far.
(With inputs from Reuters)