Chinese tech giant Alibaba Group (9988.HK) announced plans to raise approximately HK$12 billion (US$1.53 billion) through the issuance of exchangeable bonds. The funds will be directed toward expanding the company’s cloud infrastructure and global commerce operations.
The exchangeable bonds are linked to shares in Alibaba Health Technology (0241.HK), a subsidiary in which Alibaba holds around a 64% stake. Notably, the bonds will be zero-coupon, meaning they will not pay interest over time, but investors will have the option to exchange them for shares in Alibaba Health.
This proposed offering follows Alibaba’s $5 billion dual-currency bond issuance in November 2024 — the largest of its kind in the Asia-Pacific region that year.
Alibaba, known primarily for its dominance in Chinese e-commerce, has been rapidly scaling up investments in artificial intelligence, including standalone services built on its Qwen AI models, alongside expanding its cloud services and infrastructure footprint in markets like Thailand, Mexico, and South Korea.
The company’s move comes amid renewed investor interest in the Asian credit market, driven by Beijing’s recent monetary and fiscal stimulus measures.
Alibaba emphasized that despite the exchange option, Alibaba Health will continue to be a flagship healthcare platform and a consolidated subsidiary of Alibaba Group.
The strategy mirrors similar moves by other Chinese tech firms. Earlier this year, Baidu raised $2 billion through exchangeable notes linked to Trip.com shares, while Miniso completed a $550 million convertible bond deal using its Hong Kong-listed shares instead of U.S.-listed ADRs.
Alibaba’s bond offering signals both its intent to maintain control over its healthcare unit and its broader push to fund next-generation technologies and international market growth.
