Alibaba Hires CICC And Credit Suisse To Lead Secondary Listing In Hong Kong

Alibaba Listing
The logo of Alibaba Group is seen at the company's headquarters in Hangzhou (Photo: Reuters / Aly Song)

Chinese e-commerce giant Alibaba Group is likely now busy preparing for its long-awaited listing in Hong Kong. The company is reportedly getting in touch with major investment banks to help it accomplish its planned share sale in Hong Kong. According to reports citing sources close to the matter, Alibaba has apparently picked China International Capital Corp and Credit Suisse Group to head its next listing.

Alibaba has had some past experience with both investment banks. Credit Suisse previously led the company's initial public offering (IPO) in the United States back in 2014.

During that time, Alibaba managed to raise more than $25 billion; a figure that had broken past IPO records.

Alibaba currently has an existing business relationship with China International Capital Corp.

The bank had successfully helped Alibaba bring some of its subsidiaries into different equities markets. Alibaba also owns an 11.7 percent stake of China International Capital Corp, which makes it the second largest shareholder of the investment bank.

Alibaba is expected to file its formal listing application with the Hong Kong Stock Exchange (HKEX) within the next few weeks. The secondary listing could potentially raise as much as $20 billion in new capital for the company, according to market analysts.

It has to be noted that Alibaba has yet to formally reveal its funding targets. The company also hasn't yet stated how many shares it will be made available during the listing.

If the estimates are correct, Alibaba's Hong Kong listing could be the city's biggest share sale since 2010. This could be very good news for HKEX as it would make the exchange more attractive to other Chinese tech firms. Last year, Hong Kong had introduced new rules for secondary listings on its exchange. Alibaba is expected to take advantage of those rules by applying for an exemption to the standard restrictions.

 While Alibaba share sale plans are now moving along at a brisk pace, experts believe that details of the offering could still change leading to the IPO itself. Alibaba has not made any new announcement yet regarding its plan and officials have refused to comment when asked about the company's listing.

The e-commerce giant announced last month that it expects to generate more than $72.7 billion for its 2019 financial year. The company has so far increased its revenues despite the ongoing trade war between China and the United States.

Alibaba revealed in its latest earnings call that it had generated around $54.7 billion for its previous financial year ending in March. This was a 39 percent increase from its last year's revenues. 

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