Hong Kong / New York (Reuters) – China's largest e-commerce company Alibaba Group Holding Ltd has delayed its list of up to $ 15 billion in Hong Kong amid growing political unrest at the Asian financial center, two people who know about question. Reuters reported.
Alibaba Group Holding Ltd's trademark is visible outside Beijing's China headquarters on June 29, 2019. Photo taken on June 29, 2019. REITERS / STRYNER ATTENTION EDITORS – THIS IMAGE IS A PREDATOR CHINA.
Plans to include Alibaba in Hong Kong are monitored by the financial community for guidance on the business environment of China-controlled territory and provide a window to read the situation in Beijing.
Although no new timetable has been formally set, Alibaba can launch the deal in Hong Kong as early as October, aiming to raise $ 10 – $ 15 billion when political tensions ease and market conditions become favorable again, said one of people.
The decision to postpone the deal, initially set for late August, was taken at a board meeting before Alibaba's last release last week, a second person said.
The delay is due to a lack of financial and political stability in Hong Kong amid more than 11 weeks of demonstrations for democracy that are becoming more violent and disrupting the city, people added.
Tear gas is used frequently by police, with more than 700 people arrested, followed by an unprecedented shutdown at the airport last week. The Hong Kong Stock Exchange fell to seven-month lows last week.
"It would be very unreasonable to make a deal now or anytime soon," said the first man. "It would certainly annoy Beijing by offering such a great gift to Hong Kong given what is happening in the city," the source added.
Both refused to be identified as they were not authorized to speak to the media.
Alibaba declined comment on its plans for the Hong Kong deal.
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The deal, potentially the world's largest share deal for the year and the largest aftermarket of seven years, will give Alibaba a military chest to continue investing in technologies.
However, the company views it as a way to "diversify its access to capital markets" but not as a core business, a second source said. Alibaba "does not see delay as a blow," the man added.
Meanwhile, listing by Alibaba is a big deal for the Hong Kong Stock Exchange, which is lagging behind its rivals in New York in the annual battle to become a leader in global listings.
Just last month, Anheuser-Busch InBev canceled a $ 9.8 billion Hong Kong IPO planned from its Asia Pacific unit.
The city relaxed its rules last year specifically to entice overseas Chinese tech giants to list closer to home.
Alibaba will be the first to test the new system ,
Asked last week if Hong Kong's turmoil would affect Alibaba's list, Hong Kong CEO Charles Li avoided directly acknowledging the company's application, which is still technically confidential.
But Li added, "I'm sure companies like this will eventually find a home here because it's a home and I think they will come. I do not know when.
Report by Julie Ju and Greg Rumeliotis; Editing by Himani Sarkar