Even as the Alibaba Group Holding Ltd (阿里巴巴), the Chinese e-commerce juggernaut, moves closer toward one of the most anticipated initial public offerings (IPO) in recent history, potential investors have wondered about the future of its ties to its Alipay (支付寶) online payments affiliate.
On Tuesday, Alibaba disclosed that it had reworked its bonds with the affiliate — and should be reaping more money from that relationship in the future.
In an amended prospectus, Alibaba said that it plans to sell its microfinance loan business to the parent of Alipay for US$518 million. What it gets in return is this: Instead of collecting roughly half of the pre-tax income of Alipay alone, it will instead reap 37.5 percent of the entire financial business, including the microfinance business and current and future operations, like asset management, insurance and other offerings.
Should Alipay go public, Alibaba stands to make more from that stock sale. Before Tuesday’s agreement, the e-commerce company would have collected between US$2 billion and US$6 billion from the online payment company’s IPO. Now, it will receive at least US$9.38 billion, with no cap on the proceeds.
The complex agreement helps bring at least somewhat closer together Alibaba and Alipay, which separated three years ago amid some controversy. Alibaba’s main founder and chairman, Jack Ma (馬雲), split off the business because of what he said were government rules controlling foreign ownership of financial institutions. He now owns just under 50 percent of the payments company.
Yahoo, Alibaba’s biggest investor, protested. A fierce squabble ensued, although it was eventually settled with a “framework agreement” that governs how Alipay is tied to its former parent — the pact that was updated on Tuesday.
Perhaps most interesting in the new agreement is that Alibaba now says that it has the right to buy up to 33 percent of Alipay’s parent company if such an arrangement wins the blessing of the Chinese government.
A Yahoo representative said in a statement: “The restructuring was negotiated on a collaborative basis by all parties. We support this restructuring and believe it is beneficial to Alibaba and, consequently, its shareholders.”
Meanwhile, Alibaba is weighing a plan to start marketing the share sale to investors on Sept. 3, with management traveling across Asia, Europe and the US before an initial public offering in the middle of the month, people with knowledge of the matter said.
The schedule, put forth by banks managing the IPO, would have meetings begin in Hong Kong and Singapore before executives travel to London and eventually host their first US event in New York on Sept. 8, the people said, asking not to be identified discussing private information. The timeline has Alibaba targeting a Sept. 16 trading debut, the people said.
The investor meetings — called a roadshow — will give Alibaba the opportunity to answer questions from the world’s biggest fund managers and build demand for its shares. With Alibaba and selling shareholders expected to raise as much as US$20 billion, the IPO has the potential to be the largest in the US. The company’s official price range is expected to be revealed on Sept. 2.
Additional reporting by Bloomberg
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
Malaysia’s leader yesterday announced plans to build a massive semiconductor design park, aiming to boost the Southeast Asian nation’s role in the global chip industry. A prominent player in the semiconductor industry for decades, Malaysia accounts for an estimated 13 percent of global back-end manufacturing, according to German tech giant Bosch. Now it wants to go beyond production and emerge as a chip design powerhouse too, Malaysian Prime Minister Anwar Ibrahim said. “I am pleased to announce the largest IC (integrated circuit) Design Park in Southeast Asia, that will house world-class anchor tenants and collaborate with global companies such as Arm [Holdings PLC],”
Sales in the retail, and food and beverage sectors last month continued to rise, increasing 0.7 percent and 13.6 percent respectively from a year earlier, setting record highs for the month of March, the Ministry of Economic Affairs said yesterday. Sales in the wholesale sector also grew last month by 4.6 annually, mainly due to the business opportunities for emerging applications related to artificial intelligence (AI) and high-performance computing technologies, the ministry said in a report. The ministry forecast that retail, and food and beverage sales this month would retain their growth momentum as the former would benefit from Tomb Sweeping Day
Thousands of parents in Singapore are furious after a Cordlife Group Ltd (康盛人生集團), a major operator of cord blood banks in Asia, irreparably damaged their children’s samples through improper handling, with some now pursuing legal action. The ongoing case, one of the worst to hit the largely untested industry, has renewed concerns over companies marketing themselves to anxious parents with mostly unproven assurances. This has implications across the region, given Cordlife’s operations in Hong Kong, Macau, Indonesia, the Philippines and India. The parents paid for years to have their infants’ cord blood stored, with the understanding that the stem cells they contained