Chinese e-commerce giant Alibaba Group Holding Ltd. plans to raise $10 billion through a second listing in Hong Kong, in what could become the market’s largest new offering in almost a decade, reported Caixin.
A flotation of that size would mean around 2.3% of the company’s shares will be available, based on the company’s current valuation of around $430 billion. Rumors of the deal have circulated for months, although earlier reports put the fundraising target even higher at $20 billion.The deal is being underwritten by Credit Suisse Group AG and China International Capital Corp.
“The second listing is as much about accumulating dry powder for a potential China downturn as it is about diversifying any risk of U.S. authorities imposing stricter reporting requirements for Chinese companies,” said Tony Nash, founder of market forecasting firm Complete Intelligence.