HONG KONG/NEW YORK (Reuters) – China’s biggest e-commerce company Alibaba Group Holding Ltd has delayed its up to $15 billion listing in Hong Kong amid growing political unrest in the Asian financial hub, two people with knowledge of the matter told Reuters.
FILE PHOTO: A logo of Alibaba Group is seen at an exhibition during the World Intelligence Congress in Tianjin, China May 16, 2019. REUTERS/Jason Lee/File Photo
Alibaba’s Hong Kong-listing plans are being closely watched by the financial community for indications on the business environment in the Chinese-controlled territory and provides a window into Beijing’s reading of the situation.
While no new timetable has been formally set, Alibaba could launch the Hong Kong deal as early as in October, seeking to raise $10-$15 billion, when political tensions ease and market conditions become favorable again, said one of the people.
The decision to postpone the deal, initially set for late August, was taken at a board meeting before Alibaba’s latest earnings release last week, the second person said.
The delay is due to the lack of financial and political stability in Hong Kong amid more than 11 weeks of pro-democracy demonstrations which have become increasingly violent and plunged the city into turmoil, the people added.
Tear gas has been used frequently by police while more than 700 people have been arrested, followed by an unprecedented airport shutdown last week. Hong Kong’s stock market fell to seven-month lows last week.
“It would be very unwise to launch the deal now or anytime soon,” the first person said. “It would certainly annoy Beijing by offering Hong Kong such a big gift given what’s going on in the city,” the source added.
Both people declined to be identified as they were not authorized to speak to media.
Alibaba declined to comment on its Hong Kong deal plans.
DEAL CRUCIAL FOR HK EXCHANGE
The deal, potentially the world’s biggest equity deal of the year and the largest follow-on share sale in seven years, would give Alibaba a war chest to keep investing in technology.
The company, however, views it as a way to “diversify its access to capital markets”, but not as core to its business, said the second source. Alibaba “does not see the postponement as a blow,” the person added.
Meanwhile, a listing by Alibaba is a big deal for the Hong Kong stock exchange, which is lagging behind its New York rivals in the annual battle to be the leading global listings venue.
Just last month, Anheuser-Busch InBev canceled a planned up to $9.8 billion Hong Kong IPO of its Asia Pacific unit.
The city loosened its rules last year specifically to lure overseas-listed Chinese tech giants to list closer to home.
Alibaba would be the first to test the new system.
Asked last week whether Hong Kong’s turmoil would affect Alibaba’s listing, Hong Kong stock exchange CEO Charles Li avoided directly acknowledging the company’s application, which is still technically confidential.
But Li added: “I am confident that companies like that ultimately will find a home here, because this is home and I think they will come. I don’t know when though.”
Reporting by Julie Zhu and Greg Roumeliotis; Editing by Himani Sarkar
HONG KONG/NEW YORK (Reuters) – China’s largest e-commerce firm Alibaba Group Holding Ltd has delayed its up to $15 billion listing in Hong Kong amid rising political unrest within the Asian monetary hub, two individuals with information of the matter instructed Reuters.
FILE PHOTO: A brand of Alibaba Group is seen at an exhibition throughout the World Intelligence Congress in Tianjin, China Could 16, 2019. REUTERS/Jason Lee/File Picture
Alibaba’s Hong Kong-listing plans are being intently watched by the monetary neighborhood for indications on the enterprise setting within the Chinese language-controlled territory and offers a window into Beijing’s studying of the state of affairs.
Whereas no new timetable has been formally set, Alibaba might launch the Hong Kong deal as early as in October, in search of to increase $10-$15 billion, when political tensions ease and market circumstances turn into favorable once more, mentioned one of many individuals.
The choice to postpone the deal, initially set for late August, was taken at a board assembly earlier than Alibaba’s newest earnings launch final week, the second individual mentioned.
The delay is due to the dearth of monetary and political stability in Hong Kong amid greater than 11 weeks of pro-democracy demonstrations which have turn into more and more violent and plunged the town into turmoil, the individuals added.
Tear fuel has been used continuously by police whereas greater than 700 individuals have been arrested, adopted by an unprecedented airport shutdown final week. Hong Kong’s inventory market fell to seven-month lows final week.
“It could be very unwise to launch the deal now or anytime quickly,” the primary individual mentioned. “It could definitely annoy Beijing by providing Hong Kong such an enormous present given what’s happening within the metropolis,” the supply added.
Each individuals declined to be recognized as they weren’t approved to converse to media.
Alibaba declined to touch upon its Hong Kong deal plans.
DEAL CRUCIAL FOR HK EXCHANGE
The deal, probably the world’s largest fairness deal of the yr and the biggest follow-on share sale in seven years, would give Alibaba a conflict chest to maintain investing in know-how.
The corporate, nevertheless, views it as a manner to “diversify its entry to capital markets”, however not as core to its enterprise, mentioned the second supply. Alibaba “doesn’t see the postponement as a blow,” the individual added.
In the meantime, a listing by Alibaba is an enormous deal for the Hong Kong inventory trade, which is lagging behind its New York rivals within the annual battle to be the main world listings venue.
Simply final month, Anheuser-Busch InBev canceled a deliberate up to $9.8 billion Hong Kong IPO of its Asia Pacific unit.
Town loosened its guidelines final yr particularly to lure overseas-listed Chinese language tech giants to listing nearer to house.
Alibaba could be the primary to check the brand new system.
Requested final week whether or not Hong Kong’s turmoil would have an effect on Alibaba’s listing, Hong Kong inventory trade CEO Charles Li prevented instantly acknowledging the corporate’s utility, which continues to be technically confidential.
However Li added: “I’m assured that corporations like that finally will discover a house right here, as a result of that is house and I believe they may come. I don’t know when although.”
Reporting by Julie Zhu and Greg Roumeliotis; Modifying by Himani Sarkar