China E-commerce Firm Alibaba Confirms Seeking IPO in HK

Alibaba.com, China's largest e-commerce company, confirmed on Monday that it is making preparations for an initial public offering, as it seeks to raise capital to expand its international presence.

Alibaba, which has long been rumoured as an IPO candidate, is preparing to list its business-to-business unit in Hong Kong in the third quarter of this year, the official China Securities Journal reported on Monday.

"We have started preparations for an IPO," Alibaba spokeswoman Christina Splinder said, but declined to comment to CRI on details.

Alibaba had filed an application with the Hong Kong Stock Exchange for an IPO, which was expected to raise HK$7.8 billion (US$1 billion), the newspaper added, citing unnamed sources. The company had also chosen Goldman Sachs and Morgan Stanley to handle the deal, the newspaper said, adding that investment bank Rothschild was also advising Alibaba on the listing.

B2B business is Alibaba's major profit source, statistics show that the company's B2B service has accounted for 80 percent in the mainland market.

Industry believes that Alibaba's B2B bisuness has a market value of 4 to 5 billion US dollars, with its businesses of Taobao.com and Paypal, the overall value of the company may reach over 10 billion US dollars. The listing of Alibaba's B2B unit in Hong Kong may create the biggest ever technology stock in Hong Kong Stock Exchange.