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Business Wire
an hour ago
- Business Wire
Alibaba Group Announces Proposed Offering of Approximately HK$12 Billion of Zero Coupon Exchangeable Bonds
HONG KONG--(BUSINESS WIRE)--Alibaba Group Holding Limited (NYSE: BABA and HKEX: 9988 (HKD Counter) and 89988 (RMB Counter), 'Alibaba,' 'Alibaba Group' or the 'Company') today announced a proposed exchangeable bond offering (the 'Bond Offering') by reference to the ordinary shares of Alibaba Health Information Technology Limited ('Alibaba Health') that are listed on The Stock Exchange of Hong Kong Limited (the 'Hong Kong Stock Exchange') (HKEX: 00241) ('AH Shares'). Subject to market and other conditions, the Company proposes to issue approximately HK$12 billion aggregate principal amount of Zero Coupon Exchangeable Bonds due 2032 (the 'Bonds') in a private offering to certain non-U.S. persons in offshore transactions outside the United States in reliance on Regulation S under the U.S. Securities Act of 1933, as amended (the 'Securities Act'). When issued, the Bonds will be unsecured and unsubordinated obligations of Alibaba Group. The Bonds will not bear regular interest. The Bonds will mature on July 9, 2032, unless earlier redeemed, exchanged or purchased in accordance with their terms prior to such date. Holders of the Bonds may exchange all or any portion of the Bonds at their option at any time on or after the 41st day following the issue date of the Bonds to, and including, the close of business on the fifth scheduled trading day immediately preceding the maturity date of the Bonds. Upon exchange, the Company may, at its option, elect to satisfy its exchange obligation by delivering AH Shares, cash, or a combination of cash and AH Shares, each in accordance with the terms set forth in the Bonds. The initial exchange price and other terms of the Bonds will be determined at the time of pricing of the Bonds. Alibaba Health is a consolidated subsidiary of Alibaba Group, in which Alibaba Group holds approximately 64% of equity interest. Alibaba Group expects Alibaba Health to remain a flagship healthcare platform and consolidated subsidiary of Alibaba Group both upon issuance and following any future exchange of the Bonds into AH Shares, and will continue close collaboration with Alibaba Health and members of Alibaba ecosystem to drive 'AI + Healthcare' industry transformation. Alibaba Group intends to use the net proceeds from the Bond Offering for general corporate purposes, including investments to support the development of our cloud infrastructure and international commerce businesses. Investor Hedging Transactions The Company expects that certain purchasers of the Bonds may employ a convertible arbitrage strategy by short selling AH Shares or by entering into short derivative positions with respect to AH Shares to hedge their exposure to the Bonds. Any such activity could take place concurrently with or shortly after the pricing of the Bonds and could lead to any decline (or offset against any appreciation) of the market price of AH Shares or any securities referencing AH Shares, including the Bonds. Further, such investors may dynamically modify their hedges from time to time while the Bonds are outstanding, by short selling or purchasing AH Shares in secondary market transactions or entering into equivalent derivative positions, which could affect the market price of AH Shares or any securities referencing AH Shares at the time, including the Bonds. Concurrently with the pricing of the Bonds, certain bookrunners of the Bond Offering expect to facilitate a sale of AH Shares, representing the expected initial delta of such hedging investors' short position, in privately negotiated transactions solely to non-U.S. persons outside of the United States (such sale, a 'Delta Placement'). In connection with the Delta Placement, a wholly-owned subsidiary of the Company (the 'Lender') has entered into a stock borrowing and lending arrangement with an affiliate of one of the bookrunners (the 'Borrower'), pursuant to which the Lender has committed to lending a certain number of AH Shares (the 'Borrowed Shares') to the Borrower. The Borrower has agreed to on-lend a portion of the Borrowed Shares to the other bookrunners to facilitate hedging activities of certain investors in the Bonds. Other Matters The Bonds, the AH Shares deliverable upon exchange of the Bonds, if any, and the Borrowed Shares (collectively, the 'Securities'), have not been and will not be registered under the Securities Act or any U.S. state securities laws, and are being offered and sold to certain non-U.S. persons in offshore transactions outside the United States in reliance on Regulation S under the Securities Act. The Securities may not be offered or sold in the United States absent registration or an exemption from registration under the Securities Act. This press release shall not constitute an offer to sell or a solicitation of an offer to purchase any securities, in the United States or elsewhere, and shall not constitute an offer, solicitation or sale of the securities in any state or jurisdiction in which such an offer, solicitation or sale would be unlawful. This press release contains information about the pending Bond Offering and Delta Placement of Borrowed Shares, and there can be no assurance that the Bond Offering and/or the Delta Placement of Borrowed Shares will be completed. About Alibaba Group Alibaba Group's mission is to make it easy to do business anywhere. The Company aims to build the future infrastructure of commerce. It does not pursue size or power. It aspires to be a company that will last for 102 years. Safe Harbor Statement This press release contains forward-looking statements. These statements are made under the 'safe harbor' provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as 'may,' 'will,' 'expect,' 'anticipate,' 'future,' 'aim,' 'estimate,' 'intend,' 'seek,' 'plan,' 'believe,' 'potential,' 'continue,' 'ongoing,' 'target,' 'guidance,' 'is/are likely to' and similar statements. In addition, statements that are not historical facts, including statements about the intended use of proceeds, the terms of the Bonds, the Delta Placement and stock lending arrangement, future relationship between Alibaba Group and Alibaba Health, and whether the Company will complete the Bond Offering, are or contain forward-looking statements. Alibaba may also make forward-looking statements in its periodic reports to the U.S. Securities and Exchange Commission (the 'SEC'), in announcements made on the website of the Hong Kong Stock Exchange, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement. Further information regarding these risks is included in Alibaba's filings with the SEC and announcements on the website of the Hong Kong Stock Exchange. All information provided in this press release is as of the date of this press release and are based on assumptions that we believe to be reasonable as of this date, and Alibaba does not undertake any obligation to update any forward-looking statement, except as required under applicable law.
Business Insider
an hour ago
- Business Insider
China's upstart planemaker hails 'breakthrough' in its plan to take on Boeing and Airbus
China's first homegrown passenger jet is picking up steam as the planemaker Comac builds a foothold to compete with aviation's big players. The Comac C909 is designed for regional journeys, with a capacity between 78 and 90 seats. That makes it smaller than any jet currently produced by Airbus or Boeing, instead likelier to compete with those built by the Brazilian manufacturer Embraer. It attracts less attention than the larger C919 — a similar model to the Boeing 737 and Airbus A320 — but is still a key part of Comac's ambitions. As Saturday marked nine years since the C909's maiden flight, China's official state news agency Xinhua interviewed the jet's chief designer, Chen Yong. He called it "a pioneer in my country's commercial aircraft field," adding that it achieved "a breakthrough" by being China's first commercial aircraft. Tuesday then saw flag carrier Air China launch its first international service with the C909. A water-cannon salute greeted the plane as it landed in the Mongolian capital of Ulaanbaatar after a 90-minute journey from Hohhot, in China's north. "We look forward to it continuing to write the pride of domestic aircraft in the future," the airline said in a post on Weibo. That came after Lao Airlines, the flag carrier of Laos, leased two C909s from Comac and started operations in April, Xinhua reported. Later that month, Vietnam's VietJet also leased two of the jets from Chengdu Airlines, launching daily flights between Ho Chi Minh City and the nearby Con Dao archipelago. These are promising developments for the small jet, which Comac renamed from the ARJ21 last November, unifying its brand in a sign of growing ambitions. However, only 166 such planes have been delivered, Chen said. The plane also looks very similar to the McDonnell Douglas MD-80. One of Comac's predecessor companies partnered with the American planemaker in the 1980s. Meanwhile, Comac has faced allegations of corporate espionage over the C919. In 2022, a Chinese intelligence officer, Yanjun Xu, was sentenced to 20 years in prison after a US jury found him guilty of trying to steal technology related to GE Aviation's engines. The aviation industry remains divided on Comac's chances of competing with the likes of Boeing and Airbus. "Comac is years away from being certified outside China … It's going to be a very limited market for quite some time," John Schmidt, Accenture's aerospace and defense lead, told Business Insider in an interview at last month's Paris Air Show. Airbus CEO Guillaume Faury said in February that the sector could go "from a duopoly to a potential triopoly." He added that Comac was more likely to succeed thanks to its "privileged access" to the Chinese market, which accounts for a fifth of global aircraft demand.
Axios
2 hours ago
- Axios
Behind the Curtain: Zuck's AI moonshot
Mark Zuckerberg — in an unprecedented, multibillion-dollar talent raid — has dramatically reset the market for blue-chip AI builders, and further complicated the government's ability to stack its own technology bench. Why it matters: The Meta CEO is trying to lure talent from OpenAI and other tech companies with offers that can top $100 million in total compensation for the first year alone — beyond most star athletes' pay. Top-tier pay packages being offered by Meta for AI researchers can reach up to $300 million over four years, WIRED reports. A tech-news feed on X used a baseball card motif to portray an OpenAI researcher being "TRADED" to Meta. The talent derby has sent compensation soaring across AI, as rivals scramble to keep top talent and entice others not to flirt with Meta and other suitors. It's partly a continuation of an ongoing recruiting war — OpenAI built its lab with the help of some massive comp packages. Zuckerberg unveiled his dream team this week as Meta Superintelligence Labs (MSL), after meeting personally with potential recruits at his homes in Palo Alto and Lake Tahoe. The big picture: America has witnessed staggering valuations for startups. But never before have we seen company-valuation-sized salaries for people, rather than ideas or enterprises. That's injecting a new layer of drama and next-level economics for the biggest companies — many the size of nation-states — racing to win the AI wars. Collateral damage: The U.S. government is already struggling to recruit top researchers and scientists. A remotely talented AI specialist can now assume that riches in the tens of millions are attainable. So why sacrifice to serve in government? China, by contrast, can command top talent to work on government projects. A front-page Wall Street Journal story on Wednesday, "China Is Quickly Eroding America's Lead in the Global AI Race," said AI models from Chinese companies, including DeepSeek and Alibaba, are becoming popular in Asia, Europe, the Middle East and Africa. Zoom in: Zuckerberg's biggest single bet was investing $14 billion in Scale AI, and bringing co-founder Alex Wang to Meta as chief AI officer. Former GitHub CEO Nat Friedman will lead Meta's work on AI products and applied research. Eleven other new AI star hires were listed in Zuckerberg's internal memo announcing Meta Superintelligence Labs. Altman hit back at Zuckerberg's spree this week, telling OpenAI researchers in a Slack message that Meta "has gotten a few great people for sure, but on the whole, it is hard to overstate how much they didn't get their top people and had to go quite far down their list," WIRED reports. "I am proud of how mission-oriented our industry is as a whole; of course there will always be some mercenaries," Altman added. "Missionaries will beat mercenaries." Between the lines: Tech investors tell us that until very recently, the revenue outlook for AI models was unclear, and there was a debate about the return on capital spending. Now it's apparent that leading AI companies will do hundreds of billions in revenue per year. OpenAI is enjoying rampaging growth: The company said last month that it has $10 billion in annual recurring revenue, just 2½ years after the launch of ChatGPT — up from $5.5 billion last year. OpenAI has projected for investors that, fueled by AI agents and other new products, sales could total as much as $125 billion in 2029 and $174 billion in 2030, according to documents seen by The Information. Anthropic — a rival AI company led by Dario Amodei, an OpenAI alumnus — has hit a pace of $4 billion in revenue annually, up almost four times from January, The Information reported this week. At those rates of growth, you can see what Zuckerberg is seeing — and why he's suddenly pouring massive spending into making sure Meta remains a dominant AI player. The backstory: Zuckerberg is repeating a winning playbook. By 2012, he realized Facebook was behind on the mobile web. He famously redirected the entire company toward catching up. Facebook bought Instagram for $1 billion and later WhatsApp for $16 billion — racing ahead in areas where others had innovated. But this time he's betting on individuals, rather than successful enterprises. Reality check: Meta has spent a fortune on Llama, its large-language model (LLM), in an effort to develop a frontier model that can compete with OpenAI's ChatGPT, Anthropic's Claude and Google's Gemini. In a splashy story about " The List" of AI geniuses Zuckerberg is courting, the Wall Street Journal said Meta's "laggard history in generative AI has made some recruits hesitant." Bubbles can burst. AI salaries and data-center costs won't be sustainable without the ultimate payoff being unimaginably huge. And the more these companies spend, the bigger that payoff needs to be. As uncovered by a survey Axios reported last month, many small businesses using AI aren't even paying for it. The other side: Altman, noting that OpenAI has built "a culture that is good at repeatable innovation," said last month on a podcast hosted by Jack Altman, his younger brother, that Meta was making "giant offers to a lot of people on our team — like $100 million signing bonuses" and more than that in annual compensation. "We're set up such that if we succeed ... then everybody will do great financially," Sam Altman said. "[I]t's incentive-aligned with mission-first, and then economic rewards and everything else flowing from that." The bottom line: The bidding war is the most public manifestation of the secret race among AI giants — all betting that the technology will bring trillions of dollars in productivity gains. For them, the timeline is the biggest question.
