Alibaba Group Holding Ltd (NYSE:BABA) is holding talks with banks to explore the possibility of unlocking up to $4 billion in loans to finance its expansion program, including buyouts, unnamed sources told Wall Street Journal.
Alibaba wants to boost its cash pile after it forked out billions of dollars in buyouts and investments in the recent past, both in its Chinese home turf and other emerging markets such as India.
According to sources privy to the discussions, the talks, which have drawn in several financiers, began with a request for a $3 billion loan, a figure that could rise to $4 billion. The loan is expected to be ready in March.
Alibaba has been actively engaged in an investment spree that has seen it snap up several promising businesses and startups, from online payments platform in India to mobile apps and logistics providers in its Chinese home base.
China’s biggest e-commerce firm, along with its investment arm, announced in June plans to invest almost $1 billion in Koubei, an app used for ordering food, with plans to convert it into a much more diversified service that brings online users and brick-and-mortar enterprises such as hotels together.
Alibaba Has Previously Invested Over $4B in a Single Deal
In August, Alibaba said it would invest nearly $4.5 billion to purchase an approximately 20 percent shareholding in Suning Commerce Group Ltd, a Chinese electronics retailer, as it sought to improve its logistics efficiency by partnering with a major brick-and-mortar retailer.
Alibaba also announced in November that it would buyout Youku Tudou Inc., an online video streaming service, in a deal estimated at $4.4 billion.
Alibaba also foraged the Indian tech scene and announced that it had invested in Snapdeal.com, an online shopping startup. It also acquired One97 Communications Ltd, which operates a major local online payments platform known as Paytm.
Early this month, Alibaba also announced plans to acquire $30 million shares of South Korean entertainment firm S.M. Entertainment. This equals to a 4% shareholding in the Kosdaq-listed enterprise.
“Through this partnership, we’ll energizer in various fields, including China’s digital music industry,” S.M. Entertainment said in a statement obtained by Forbes. “We’ll continue to localize and expand our business in China.”
Alibaba has also sold its shares in some companies in order to free up cash to invest in other profitable ventures. Last month, it reached a deal to sell its stake in Meituan-Dianping, China’s biggest online platform for movie tickets purchase, restaurant bookings, among other on-demand services, for $900 million. However, the move was seen as being informed by the need to develop its own competing service Koubei.
Strong Earnings Performance…
Alibaba recently released its earnings results for the quarter through Dec. 31, 2015, that topped analysts’ consensus. Combined revenues grew 32%, while sales in mainland China rose 35%.
The NYSE-listed company reported that its gross merchandise volume (GMV)- -which measures the total value of all goods sold via its sites — grew 23% to 964 billion yuan ($147 billion).