Alibaba looks to raise $5bn through bond sale amid regulatory scrutiny

Size of the the offering this month could be increased to $8bn, depending on investor response

The logo of Alibaba Group is seen at its office in Beijing. The company is planning to raise $5bn through a bond sale this month. Reuters

China's Alibaba plans to raise at least $5 billion through the sale of a US dollar-denominated bond this month, sources said, amid regulatory scrutiny of co-founder Jack Ma's empire.

Depending on investor response, proceeds could reach $8bn which the e-commerce giant is likely to use for general corporate expenditure, one of the people said.

The fundraising will be a test of investor sentiment towards Alibaba, coming months after an October speech from billionaire Mr Ma about regulation stifling innovation that led to the halting of affiliate Ant Group's $37bn stock market listing.

Mr Ma's absence from public view in the intervening time has fuelled social media speculation over his whereabouts.

The bond sale plan, including the timeline, is not finalised and is subject to change, the sources said, declining to be named.

Alibaba declined to comment.

Since Mr Ma's speech, Chinese regulators have begun an antitrust probe into Alibaba and ordered FinTech Ant to change its lending and other consumer finance businesses, including the creation of a holding company to meet capital requirements.

Regulators are also reviewing Ant's equity investments in dozens of companies and considering whether to instruct the firm to divest some of them, Reuters reported last month.

Alibaba's international bond offering, if finalised, would be the group's third, Refinitiv data showed. It sold an $8bn US dollar bond in 2014, and a $7bn tranche in 2017, the data showed.

With its latest float, Alibaba will join a slew of Asian companies that have taken advantage of cheaper borrowing costs and abundant liquidity in global markets in recent months.

The terms of the offering were not immediately known. Marketing documents were likely to be available as soon as next week, and that the tenure of the bond is likely to be 10 years, according to two of the sources.