The Firm recently represented Alibaba Group Holding Limited (“Alibaba Group”) in connection with its offering (the “Bond Offering”) of approximately HK$12 billion (US$1.53 billion) aggregate principal amount of Zero Coupon Exchangeable Bonds due 2032 (the “Bonds”) exchangeable into the ordinary shares of Alibaba Health Information Technology Limited (“Alibaba Health”) that are listed on The Stock Exchange of Hong Kong Limited (the “Hong Kong Stock Exchange”) (HKEX: 00241) (“AH Shares”). The Bonds were offered to certain non-U.S. persons in offshore transactions outside the United States in reliance on Regulation S under the U.S. Securities Act of 1933, as amended (the “U.S. Securities Act”).
Alibaba Group may, at its option, elect to satisfy its exchange obligation by delivering AH Shares, cash, or a combination of cash and AH Shares, in accordance with the terms set forth in the Bonds.
Concurrently with the pricing of the Bonds, certain bookrunners of the Bond Offering facilitated hedging activities of certain investors in the Bonds, in privately negotiated transactions solely to non-U.S. persons outside of the United States (the “Delta Placement”). In connection with the Delta Placement, a wholly-owned subsidiary of the Company (the “Lender”) entered into a stock borrowing and lending arrangement with an affiliate of one of the bookrunners (the “Borrower”), pursuant to which the Lender committed to lend a certain number of AH Shares (the “Borrowed Shares”) to the Borrower. The Borrower agreed to on-lend a portion of the Borrowed Shares to the other bookrunners to facilitate hedging activities of certain investors in the Bonds.
Alibaba Health is a consolidated subsidiary of Alibaba Group. Alibaba Group expects Alibaba Health to remain a flagship healthcare platform and consolidated subsidiary of Alibaba Group upon issuance and following any future exchange of the Bonds into AH Shares, and will continue close collaboration with Alibaba Health and members of Alibaba ecosystem to drive “AI + Healthcare” industry transformation.
The Simpson Thacher team included Roxane Reardon, Matt Hart and Leena Sanka (Capital Markets – U.S.); Daniel Fertig, Christopher Wong, Chenjing Shen, June Hu, Jeff Wong and Christy Li (Capital Markets – Hong Kong); Lucy Gillett, Charles English and Robert Williams (Capital Markets - London); Jonathan Lindabury, Marc Langer and Lindsey Meyers-Perez (Derivatives); and Jonathan Cantor and Preston Irace (U.S. Tax).