ALIBABA Group Holding Ltd. is considering options to pare down its minority stake in express delivery firm ZTO Express (Cayman) Inc., according to people familiar with the matter.
Alibaba has held talks with investment banks to evaluate a potential sale of bonds exchangeable into the shares of ZTO Express, the people said, asking not to be identified because the deliberations are private. Considerations are ongoing and Alibaba may still decide against selling exchangeable bonds, the people said.
Representatives for Alibaba and ZTO didn’t immediately respond to requests seeking comment.
Alibaba led a group of investors in buying 10% of ZTO for $1.38 billion in 2018 to boost its global shipping services. The investor group included Alibaba’s logistics arm Cainiao, it said at the time, without identifying other buyers.
ZTO Express raised $1.4 billion in an initial public offering in New York in 2016, and then a second listing in Hong Kong raised a similar amount in 2020.
ZTO’s shares are down about 13% in the US this year. The Shanghai-based company has a market value of around $13.6 billion.
A sale of exchangeable bonds by Alibaba would echo a similar move by fellow Chinese tech company Baidu Inc., which in March raised $2 billion by selling bonds exchangeable into the Hong Kong shares of online-travel agency Trip.com Group Ltd. –BLOOMBERG
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