SYDNEY\/BENGALURU (Sept 11): China e-commerce giant leader on Thursday said it plans to raise about US$3.2 billion (RM13.5 billion)\u00a0through the sale of a zero-coupon convertible bond to fund international business expansion and to strengthen its cloud computing.<\/p>\n
Alibaba, among China’s most aggressive adopters of artificial intelligence (AI), said it would use nearly 80% of the proceeds to expand data centres, upgrade technology and improve services, to meet rising demand for cloud computing solutions.<\/p>\n
It said it will invest the remaining 20% in enhancing market presence and improving efficiency in global e-commerce ventures.<\/p>\n
The senior note will mature on Sept 15, 2032. The bond will convert into Alibaba’s US-listed shares.<\/p>\n
Alibaba raised US$1.5 billion in July via an exchangeable bond and US$5 billion in May last year through a convertible bond.<\/p>\n
The e-commerce firm in August said AI was key to expanding in cloud computing, where it reported strong quarterly growth, even as its wider operations missed revenue estimates.<\/p>\n
Alibaba has invested 100 billion yuan (US$14.04 billion) over the past year in AI infrastructure, and product research and development, chief executive officer Eddie Wu said in an earnings call.<\/p>\n
On Thursday, China Pacific Insurance\u00a0also said it would issue a zero-coupon convertible bond, with the goal of raising HK$15.55 billion (US$2.00 billion).<\/p>\n
Hong Kong’s equity capital markets have been on a hot streak in the past six months. Convertible bonds have proven particularly popular, as they offer the prospect of equity gains with some paying a coupon, and their principal is repaid at maturity if the option to convert into shares is not exercised.<\/p>\n
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