Alibaba Group on Friday announced the launch of its Hong Kong public retail offering, which forms part of a global offering of 500,000,000 new ordinary shares and listing of its ordinary shares on the The Stock Exchange of Hong Kong Ltd. under the stock code “9988.”
Alibaba’s American depositary shares, with each ADS representing eight ordinary shares, will continue to be listed and traded on the New York Stock Exchange. Upon listing in Hong Kong, the Hong Kong-listed shares will be fully fungible with the ADSs listed on the NYSE.
“Alibaba Group is guided by our mission to make it easy to do business anywhere with the vision to be a good company that lasts for 102 years,” said Alibaba Group Chairman and Chief Executive Officer Daniel Zhang. “We aim to serve global consumers, of which more than 1 billion will be Chinese consumers and facilitate more than RMB10 trillion of consumption on our platform within the next five years by continuing to pursue our three strategic pillars of globalization, domestic consumption and big data powered by cloud computing.”
“Hong Kong is one of the world’s most-important financial centers, and we are grateful for the opportunity to participate in the future of Hong Kong,” he added.
Read Daniel Zhang’s Letter to Investors here.
The Hong Kong listing will allow more of Alibaba’s users and stakeholders in its digital economy across Asia to invest in and participate in the fruits of its growth. In addition to expanding Alibaba’s overall investor base, the offering will tap into substantial new capital pools in Asia and create a nearly round-the-clock market for global investors to trade Alibaba shares.
The overall offering initially comprises 12,500,000 new shares under the public retail offering and 487,500,000 shares for subscription globally.
Subject to the level of any oversubscription in the public retail offering and pursuant to the claw-back mechanism as described in the prospectus Alibaba issued in Hong Kong, the total number of shares available under the public retail offering could be adjusted to up to a maximum of 50,000,000 new shares, representing 10.0% of total shares initially available under the overall offering.
Alibaba also expects to grant the international underwriters an over-allotment option to purchase up to an additional 75,000,000 new shares.
The offer price for the public retail offering will be no more than HK$188.00 per share. The offer price for the international tranche of the offering may be set higher than the maximum public retail offer price. Alibaba will set the international offer price by Nov. 20, 2019, Hong Kong time by taking into consideration, among other factors, the closing price of the ADSs on the NYSE on or before the last trading date and investor demand during the marketing process.
The final public retail offer price will be set at the lower of the final international offer price and the maximum public retail offer price of HK$188.00 per share. Shares will be traded in board lots of 100 shares each.
Alibaba plans to use the proceeds from the offering for the implementation of its strategies of driving user growth and engagement, empowering businesses to facilitate digital transformation and continuing to innovate and invest for the long term.
Fully Electronic Application Process for the Public Retail Offering
Alibaba decided to use a fully electronic application process for the public retail offering, with no printed prospectuses or application forms. A fully electronic application process is consistent with the way in which Alibaba’s customers and digital economy participants conduct their transactions with each other and Alibaba.
As a company that aspires to last for 102 years, Alibaba said in a press release that it’s focused on the health of the planet and that it believes it has a responsibility to minimize its carbon footprint and environmental impact of the offering. The prospectus will be available at the website of the Hong Kong Stock Exchange at www.hkexnews.hk and on the www.alibabagroup.com website.
Alibaba said it encourages applicants for the public retail offering in Hong Kong to view its prospectus and apply online through the White Form eIPO service at www.eipo.com.hk, or through the CCASS EIPO service, either directly or through their brokers or custodians.
The public retail offering will commence at 9:00 a.m. Friday, Nov. 15, 2019, Hong Kong time, and will close at 12:00 noon on Wednesday, Nov. 20, 2019, Hong Kong time.
For more details, you can read Alibaba’s press releaseand a letter to investors from Daniel Zhang.