Alibaba completes HK$12 billion exchangeable bond offering

Alibaba Group Holding Limited (NYSE: BABA) announced completion of its private offering of HK$12.023 billion aggregate principal amount of zero coupon exchangeable bonds due 2032. The bonds reference ordinary shares of Alibaba Health Information Technology Limited (HKEX: 00241), a consolidated subsidiary in which Alibaba holds approximately 64% equity interest.

The bonds were sold to non-U.S. persons in offshore transactions outside the United States under Regulation S of the U.S. Securities Act of 1933. The unsecured and unsubordinated obligations do not bear regular interest and will mature on July 9, 2032.

Bondholders may exchange all or any portion of the bonds at their option starting 41 days after the issue date through the close of business on the fifth scheduled trading day before maturity. Upon exchange, Alibaba may elect to satisfy its obligation by delivering Alibaba Health shares, cash, or a combination of both.

The initial exchange ratio is approximately 160,513.6 Alibaba Health shares per HK$1,000,000 principal amount of bonds, equivalent to an initial exchange price of HK$6.23 per share. This represents a 48% premium over the HK$4.21 per share price in a concurrent delta placement conducted by bookrunners to facilitate hedging activities by certain investors.

Based on the initial exchange price and assuming full exchange of bonds for shares, the initial exchange property represents up to approximately 12% of Alibaba Health's issued share capital as of June 30, 2025. The exchange price and ratio will be subject to customary adjustments outlined in the bond terms.

The bonds are expected to be listed on the Vienna MTF operated by the Vienna Stock Exchange within 60 days after closing of the bond offering.

Alibaba stated it expects Alibaba Health to remain a flagship healthcare platform and consolidated subsidiary following any future exchange of bonds into shares, according to the press release.

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