Alibaba looks to sovereign wealth funds
- By Zhang Junmian
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E-mail China.org.cn, June 11, 2012
Alibaba Group, China's largest e-commerce player, is ready to sell a stake to sovereign wealth funds to finance its plan to buy back shares from Yahoo! Inc., Alibaba's founder and CEO Jack Ma told the media on June 7 in Beijing.
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Alibaba Group, China's largest e-commerce player, is ready to sell a stake to sovereign wealth funds to finance its plan to buy back shares from Yahoo! Inc., Alibaba's founder and CEO Jack Ma told the media on June 7 in Beijing. [File Photo] |
Ma said that the company is now inviting investments from firms such as China Investment Corp (CIC) and Singapore-based Temasek Holdings Pte, with the aim of shaping a "healthy shareholder structure" to ensure the management's control on the company.
Ma said that Alibaba needs the support from heavyweights, but it's more important to ensure sound corporate governance. "I don't want to have another big guy here. Otherwise, five or ten years later, the next generation of management will face greater pressure from the large stakeholders."
Sources with the First Financial Daily said that Alibaba has been in talks with the CIC on investment possibilities. The CIC, as well as the new stockholders to join in the future, will be required to surrender its voting rights to Alibaba as a pre-condition to the potential investment deals.
Some other sources said that the CIC is to invest US$2 billion to help the company raise enough money for its buyback plan.
Temasek is already an investor in Alibaba. Last September, Temasek, DST Global and Silver Lake bought 5 percent stake in the company with US$1.6 billion.
Alibaba is raising some US$4.6 billion through various channels, including issuance of preferred stocks, bank loans, and selling stakes to its current stockholders. It's also said to be negotiating with some private equity firms, including Bain Capital, Hony Capital and Blackstone Group.
Alibaba and Yahoo reached an agreement last month on a repurchase plan for half of Yahoo's 40 percent stake in the Chinese company for about US$7.1 billion.
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