China’s Alibaba started restructuring with a plan to list its logistics arm in Hong Kong. Alibaba Group (9988. HK) began its reorganization on Tuesday by listing its logistics business Cainiao in Hong Kong, making it the first entity to be split apart since its split six months earlier.
Alibaba applied to the Hong Kong stock exchange to spin off Cainiao Smart Logistics Network on Tuesday, but financial terms, including the offering size, had not been finalized.
Alibaba, which owns 69.54% of Cainiao, said it will remain a subsidiary and own more than 50% of its shares following the spin-off. Reuters said in May that Cainiao sought $1–2 billion. Since Alibaba co-founded Cainiao in 2013 with department store owner Intime Group and several logistics businesses, the subsidiary has become a significant logistics provider in China, servicing Alibaba and third-party clients.
Dealmakers anticipate Cainiao’s IPO, followed by additional Alibaba subsidiary listings, would boost Hong Kong fundraising.
Alibaba’s U.S.-listed shares fell 0.4% to $86.86 at 1037 GMT after Tuesday’s news.
Alibaba announced its largest reorganization in 24 years in late March. It will operate as a holding company with six entities, most seeking capital raises or market debuts to grow.
The redesign was revealed a day after Alibaba founder Jack Ma returned from a year overseas and coincided with Beijing’s efforts to boost private sector development after two years of pressure. In recent months, the corporation has secured external financing for its worldwide commerce branch and considered listing its cloud segment.
However, Daniel Zhang, who had relinquished his duties as CEO and chairman to focus on the cloud company, abruptly quit the cloud segment earlier this month.
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