HONG KONG (AP) – Alibaba plans to spin off some of its sprawling e-commerce and finance empire as independent businesses to make them more flexible and maximise their value, its top executives said yesterday, as the company emerges from regulatory crackdowns that rattled Chinese tech industries.
Alibaba CEO Daniel Zhang outlined details of a plan announced earlier this week to split Alibaba into six main groups as a prelude toward stock listings of some of its companies. The restructuring marks a new stage in Alibaba’s growth after a series of setbacks as regulators tightened oversight of the industry.
Alibaba, whose headquarters is in the eastern city of Hangzhou, will be “in the nature of a holding company that is the controlling shareholder of the business group companies”, Zhang said in a conference call.
Alibaba’s CFO, Toby Xu, said the company would continue to evaluate the strategic importance of group companies after they go public and decide whether or not to retain control. He declined to say when they might go public.
“We believe the market is the best litmus test, so each business group company can pursue independent fundraising and IPOs as and when they are ready,” Xu said.
Alibaba’s stock prices in Hong Kong and New York have rallied nearly 15 per cent since the restructuring was announced on Tuesday. The firm’s Hong Kong-listed stock was up 0.9 per cent by midday yesterday.
The plan, and the recent return of Alibaba founder Jack Ma to China after months abroad appear to mark a turnaround after several hard years. Chinese regulators singled out Alibaba for scrutiny in a crackdown on technology and internet companies, putting the brakes on a planned initial public offering in 2020 of Alibaba’s financial affiliate Ant Group.
