Alibaba Health will raise fresh capital worth $1.06 billion through a follow-on new share sale, media reports said. The funding will support the company’s goal to expand its pharmaceutical and medical services network which received a major boost from the outbreak of Covid-19 pandemic.
Jessie Qian, partner and head of consumer and retail at KPMG China, told the media, “As consumers in China continue to adapt to the pandemic and its after-effects, it is clear that changes to their purchasing behaviours are here to stay.”
It is reported that the company is offering 400 million new shares, or 3.1 percent of its outstanding share capital in a tight range between $2.59 and $2.65. The share prices are calculated in accordance to a discount of 6 percent to 8 percent to its latest closing prices. However, the final share price will be determined during the time of closing the deal. Credit Suisse and Citigroup have shown significant interest in the deal.
According to KPMG, consumers in China and Hong Kong are largely dependent on ecommerce sites for shopping.
Furthermore, Alibaba Health has joined hands with Tmall during the crisis to launch medicine delivery services to patients with chronic diseases in China. Companies such as Alibaba and Amazon have managed to stay afloat in the market amid the Covid-19 crisis but many companies are struggling to make profit.
The new development by Alibaba Health will strengthen its position in the current market.