China’s ecommerce giant Alibaba is set to raise around $12.9 billion in its secondary listing in the Hong Kong Stock Exchange, according to media reports. The listing is expected to be the year’s biggest fundraising event as it would overtake Uber’s $8.1 billion debut in New York.
The company is expected to issue 500 million new ordinary shares along with a 75 million greenshoe option. Reportedly, around 50 million of these shares will be reserved for retail investors. The ecommerce giant will price its shares at a 2.8 percent discount to its last closing price in New York.
Alibaba’s listing will also be Hong Kong’s largest initial public offering since insurance giant AIA raised $20.5 billion in 2010.
Alibaba is expected to start trading its shares on the Hong Kong Stock Exchange from November 26, 2019.
According to earlier media reports, the company planned to raise around $13.4 billion by exercising the greenshoe option. The listing was scheduled to take place earlier this year, but it was postponed due to the anti-government protests taking place in the streets of Hong Kong.
Alibaba’s decision to go ahead with the listing will come as a sign of relief for Hong Kong as the political instability has pushed Hong Kong to the brink of a recession.
Travis Lundy, an analyst at Quiddity Advisors referred to Alibaba’s listing in Hong Kong as ‘escape valve listing’.
He told the media, “Investors can take delivery or buy and sell shares in Hong Kong should US-China relations worsen. This should be considered a non-negligible benefit for any US-listed Chinese company.”
Earlier in 2014, Alibaba raised $25 billion in its New York IPO, which still holds the record of the world’s largest share sale. However, Aramco is expected to break Alibaba’s record this year.