FILE PHOTO: The Alibaba group logo is seen at the high profile startups and high tech leaders gathering, Viva Tech, in Paris, France, May 16, 2019. REUTERS/Charles Platiau
BEIJING (Reuters) – China’s Alibaba Group Holding has proposed a one-to-eight stock split ahead of a listing in Hong Kong later this year that is expected to raise up to $20 billion.
The split, to be presented to shareholders for a vote at an annual general meeting in Hong Kong on July 15, will increase flexibility in the firm’s capital raising activities, including the issuance of new shares, the e-commerce giant said.
The firm’s board recommends shareholders to vote in favor of the proposal, it added in its statement dated Friday but published on the company’s website on Monday.
“The … subdivision will increase the number of shares available for issuance at a lower per share price,” it added.
Alibaba has filed confidentially for a Hong Kong listing, a person familiar with the matter told Reuters earlier this month.
Alibaba has also proposed to change the ratio of ordinary shares to American Depositary Shares (ADS) to eight ordinary shares representing one ADS to neutralize the impact of share split on its ADS listed in the U.S. market.
Reporting by Beijing Monitoring Desk; Editing by Himani Sarkar