China's Alibaba.com Seeks up to US$1.33 Billion in Hong Kong IPO

Source: AP

HONG KONG: Alibaba.com Ltd. is raising up to US.33 billion (€940 million) on the Hong Kong exchange in what is set to be the largest initial public offering by a Chinese technology operator, the company said in a preliminary listing prospectus Monday.

The business-to-business operator, founded by its chairman Jack Ma in June 1999 and with a registered user base of 24.6 million, is selling 858.9 million shares, or 17 percent of its enlarged share capital, in an indicative price range of HK$10 to HK$12 (US$1.29-US$1.55) each, according to the listing document.

The institutional tranche accounts for three-quarters of the shares on offer, while the local retail tranche accounts for 15 percent.

Yahoo! Inc., which holds a 39 percent stake in Alibaba.com's parent, Alibaba Group, has undertaken to subscribe to about US0 million (€70.6 million) worth of shares, or 8.2 percent of the offering.

Alibaba.com said five other investors are also subscribing to a total US$145 million (€102.3 million) worth of its shares in the IPO, which are subject to a lockup period of two years.

They are AIG Global Investment Corp. (Asia) Ltd., Industrial & Commercial Bank of China Ltd. and investment companies held by Wharf Holdings Ltd. Chairman Peter Woo, Malaysian tycoon Robert Kuok and the Kwok family of Sun Hung Kai Properties Ltd.

Pricing of the IPO is expected Oct. 26, and the company's listing on the Hong Kong bourse is scheduled for Nov. 6.

The preliminary listing document said Alibaba.com's registered-user base expanded four times over the past four years to 24.6 million by the end of June from 6 million by the end of 2004.

Its paying members also rose more than three times to 255,000 in the period, up from 77,000 by the end of 2004.

The company recorded a net profit of 295.2 million Chinese yuan (US$39.2 million; €27.5 million) in the six months ended June. It expects its net profit to more than triple to 622 million yuan (US$83 million; €58 million) from 219.9 million yuan (US$29.2 million; €21 million) last year, on strong growth in revenue from both its international and Chinese Web sites.

Unlike other offerings in which most of the shares on offer are newly issued shares, nearly three-quarters of the shares in the IPO are existing shares held by Alibaba.com's parent, Alibaba Group.

Alibaba.com also has an overallotment option to sell an additional 113.7 million existing shares to raise a total US$1.5 billion (€1.1 billion), the document said.

Editor: Helena Zhang