Chinese internet giant Alibaba Group Holding has announced a share placement worth 80 billion Hong Kong dollars ($10.2 billion).
According to the company’s press release, it will sell 710 million shares at a price of HK$112.7. The proceeds from the placement will be used to fund chip development, infrastructure expansion and artificial intelligence models.
The shares will be sold at a price 8.4 per cent below Friday’s closing price.
The underwriters for the offering are China International Capital Corp., HSBC Holdings Plc, Morgan Stanley and UBS Group.
Total subscriptions amounted to $28 billion, of which around $6 billion came from long-term investors, Reuters reports, citing sources. These include major sovereign wealth funds from Europe, Asia and the Middle East.
This secondary offering is the largest in history among companies listed on the Hong Kong Stock Exchange, and the third-largest in the world this year after Alphabet and Intel, which sold shares worth $85 billion and $20 billion respectively.
Alibaba’s share price fell by 8.9 per cent to $112 during trading in Hong Kong on Monday. Since the start of this year, the company’s market capitalisation has fallen by almost 22 per cent (to $2.36 trillion), whilst the Hang Seng Index has lost less than 1 per cent.