Alibaba, Alipay revamp profit agreement ahead of IPO

Alibaba Group and Small and Micro Financial Services, the parent of third-party payment provider Alipay, have agreed to a renegotiated contract under which Alibaba will receive a smaller share of Small and Micro’s pretax income, but that share will come from a wider profit pool including all of Small and Micro’s businesses, The Wall Street Journal reported, citing a Tuesday regulatory filing. Alibaba will receive 37.5% of Small and Micro’s income, previously 49.9%. A US$6 billion cap on Alibaba’s proceeds will also be removed if Small and Micro goes public or is sold. The move is intended to address investor concerns ahead of Alibaba’s pending IPO.