China’s Alibaba Group has unveiled a secondary listing plan in Hong Kong dubbed “Project Tangerine” in an effort to raise about $13 billion, The Wall Street Journal reported on Wednesday (Nov. 13).
Alibaba could raise up to $13.38 billion based on Tuesday’s closing price. The deal’s final price will be decided on or around Nov. 20.
This transaction is Hong Kong’s largest share sale in more than nine years, and is a boost to the city amid protests and government conflict. The unrest is being monitored and could be a risk to the deal moving forward, sources told the news outlet. Alibaba had intended to sell the shares earlier this year, but postponed the deal as protests became violent.
According to the 661-page draft prospectus, this could be the biggest cross-border secondary listing. Alibaba will soon begin “a weeklong roadshow for prospective investors,” a source told Reuters. The stock is due to start trading the week of Nov. 26 in Hong Kong.
Alibaba plans to use the funds for the online delivery platform Ele.me and for the online travel group Fliggy. It will also boost its funding in cloud computing and machine learning, the prospectus shows.
Alibaba Cloud is currently the world’s third-largest Infrastructure as a Service business, a study by Gartner indicates.
The prospectus also shows that Alibaba has 960 million “digital economy users” in China, which include customers of its Ant Financial partnership.
Alibaba earns income mainly from selling promotional services and advertising to third-party merchants, which list items on the Tmall and Taobao eCommerce sites. Its total revenue increased to $16.91 billion or 119.02 billion yuan in Q2, which ended on Sept. 30, from 85.15 billion yuan a year prior. According to Refinitiv IBES data, analysts were forecasting revenue of 116.8 billion yuan.
The earnings results were prior to the Singles’ Day shopping event, which broke records for the eCommerce site.
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