Allen & Overy advises on the largest ever financing for a private sector Chinese company
Alibaba Group Holding Limited, China's largest e-commerce company, announced the completion of its initial repurchase of shares from Yahoo!, which represented one-half of Yahoo!'s 40% stake in Alibaba Group on a fully diluted basis, on 18 September 2012.
The initial repurchase of shares was valued at approximately USD7.1 billion. Of this Yahoo! received approximately USD6.3 billion in cash and USD800 million in preference shares in Alibaba Group. Allen & Overy advised China Development Bank Hong Kong branch on a senior debt facility of USD1 billion to Alibaba Group for this transaction.
Alibaba Group financed the transaction by a mixture of cash, senior debt and the issuance of convertible preference and ordinary shares. China Development Bank Hong Kong branch was the only Chinese bank which provided the senior financing, alongside eight international banks which together provided a parallel senior debt facility of USD1 billion to Alibaba Group in support of the transaction.
Cindy Lo, the Beijing-based banking partner who led the team advising China Development Bank, said: “Alibaba's repurchase of shares from Yahoo! is a landmark transaction for the technology sector in China, and the financing package for the repurchase transaction was the largest ever private financing for a private sector Chinese company. We are delighted to have worked with China Development Bank in such a significant transaction."
The Allen & Overy team, supporting Cindy Lo, included Hong Kong-based associates David Oppenheimer and Hilarie Lam and trainees Heidi Li and Welber Yim. Allen & Overy's New York team, led by Elizabeth Leckie and supported by Yanmei Wei and Phillip D Lee, provided advice on the US security arrangement.