Ali’s Hong Kong listing tomorrow: net proceeds to raise HK$87,557 million

Tomorrow, Alibaba will list in Hong Kong. On November 25th Alibaba Group (NYSE: BABA, 09988.HK) announced that it would receive a net sum of about HK$87,557million from the global offering at HK$176 per share. According to the announcement, the number of shares offered under Alibaba’s global offering was 500 million, the number of shares offered in Hong Kong was 50 million and the number of shares sold internationally was 450 million.

Ali's Hong Kong listing tomorrow: net proceeds to raise HK$87,557 million

In its previous prospectus, Alibaba sold 12.5 million shares in Hong Kong and 487.5 million shares in international offerings. Alibaba also said in its prospectus that it could adjust these numbers. In addition, Alibaba is expected to award an over-allocation to international underwriters, which could require the group to issue up to 75 million additional shares.

In its announcement today, Alibaba noted that if the over-quota equity is fully exercised, it will issue 75 million shares and receive an additional net raise of approximately HK$13.166 billion.

Ali's Hong Kong listing tomorrow: net proceeds to raise HK$87,557 million

The announcement disclosed that the Initial available-for-subscribe Hong Kong Offering Shares under the Hong Kong Public Offering were oversubscribed and a total of 215,598 valid applications were received for a total of 530 million shares of Hong Kong Offering, equivalent to about 42.44 times the total number of shares initially available for subscription under the Hong Kong Public Offering for Hong Kong Offerings.

As the oversubscription of the Hong Kong Public Offering is equivalent to 20 times or more of the total number of shares initially available for subscription under the Hong Kong Public Offering, 37.5 million shares have been reassigned from the international offering to the Hong Kong public offering. The final number of shares offered under the Hong Kong Public Offering was thus increased to 50 million shares, equivalent to 10% of the total number of shares initially available for subscription under the Global Offering and allocated to 195710 successful applicants under the Hong Kong Public Offering.

In addition, the shares initially submitted for sale under the International Offering were oversubscribed. The final number of shares allocated to the lessee under the international offering is 450 million shares, equivalent to 90 per cent of the total number of shares initially available for subscription under the global offering. As of the announcement date, the over-allocation of equity has not been exercised.

On the same day, in a separate announcement, Alibaba said that since July 30, 2019, the board of directors decided to split Alibaba’s ordinary shares of “one eight”, the shares split, Alibaba authorized share capital of $100,000, the number of common shares increased to 32 billion shares, a face value of 0.000003125 dollars per share.

In its prospectus, which was disclosed on November 15, Alibaba said the fund-raising would be used primarily to drive user growth and increase engagement and would continue to expand and offer a wide range of products and services in the digital economy. In addition to the purpose of the fund-raising, the prospectus also discloses Alibaba’s equity structure, business map, and risk warnings.

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