Alibaba Launches HK$12 Bln Exchangeable Bond Offering Linked To Alibaba Health Shares

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(RTTNews) - Alibaba Group Holding Ltd. (BABA), a Chinese technology company, on Thursday announced that a proposed exchangeable bond offering linked to the ordinary shares of Alibaba Health Information Technology Ltd. (ALBBY, ALBHF).

The company plans to issue zero-coupon exchangeable bonds due 2032, with a total principal amount of approximately HK$12 billion.

The company plans to use the net proceeds from the bond offering for general corporate purposes, including investments to support the growth of its cloud infrastructure and international commerce businesses.

Once issued, the bonds will be unsecured and unsubordinated obligations of the company. They will carry no regular interest and are set to mature on July 9, 2032, unless redeemed, exchanged, or repurchased earlier under their terms.

The company said that the bondholders will have the option to exchange all or part of their bonds starting on the 41st day after issuance and up until the fifth scheduled trading day before the bonds mature.

Upon exchange, the company may choose to settle the obligation by delivering Alibaba Health shares, cash, or a combination of both, in line with the terms of the bonds. The initial exchange price and other key terms will be set at the time of pricing.

Alibaba Health is a consolidated subsidiary of Alibaba Group in which the company holds around 64% equity interest, and is expected to remain a core part of the group's healthcare strategy even after the bond issuance and any potential exchange of bonds into Alibaba Health shares.

In the pre-market trading, Alibaba is 2.61% lesser at $107.84 on the New York Stock Exchange.