PEKING (dpa-AFX) - Alibaba.com Ltd. (ALBIY.PK, ALBCF.PK), a major e-commerce firm in China, on Monday said it has submitted a proposal to the Hong Kong Stock Exchange related to its plan to spin-off non-wholly owned subsidiary HiChina Group Ltd. through an initial public offering of shares. The spin-off will result in a reduction of the company's percentage shareholding in HiChina.
HiChina is seeking a separate listing and public offering of its shares in the United States. The company is yet to finalize the details of the offering, including its size, structure and price. The offering documents are currently under review by the relevant securities regulatory authority. Alibaba.com said it will make further announcement as and when appropriate.
HiChina is a full-service Internet infrastructure services provider that provides domain name services, traditional hosting services, cloud-based services and website building solutions to small-and-medium enterprises in China. It was December 2009 that Alibaba acquired an 85 percent stake in China Civilink (Cayman), which operated in China as HiChina Web Solutions, for $79 million.
Alibaba noted that its Board expects that all relevant percentage ratios under the listing rules for the spin-off, if materializes, will be below the threshold of a discloseable transaction for the company. This is on the basis that HiChina remains a non-wholly owned unit of the company after the completion of the offering.
Further, the company said its board, in accordance with regulatory requirements, proposes to give due regard to the interests of its shareholders by providing an assured entitlement, provided that the proposed spin-off proceeds and certain conditions are fulfilled. The company is yet to finalize the details of the terms of the assured entitlement.
LU Zhaoxi, Jonathan, Chief Executive Officer & Executive Director, said in a statement, 'Shareholders should note that the Assured Entitlement is conditional upon completion of the Proposed Spin-off, which is itself conditional upon the satisfaction of certain conditions including, without limitation, the conditions of the equity markets, the approval of the relevant regulatory authorities and stock exchanges, and other relevant regulatory procedures.'
Alibaba added that the proposed spin-off may or may not proceed, and if it does not occur, shareholders will not get any assured entitlement.
There were reports last week that a consortium led by private equity firm Silver Lake Partners, and Russian investment firm DST Global agreed to invest about $1.6 billion in Alibaba. The consortium also includes Chinese private equity firm Yunfeng Capital and Singapore-based investment firm Temasek, among others, the reports said.
Alibaba is currently trading at HK$6.72, down HK$0.27 or 3.86 percent on Hong Kong Stock Exchange.
In the U.S., Alibaba shares closed Friday's regular trading session at $4.58, up $0.40 or 9.57 percent, and ALBCF.PK settled at $0.920, up $0.030 or 3.37 percent.
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