Financing Alibaba’s Buyout: Syndicated Loan in Asia Harvard Case Solution & Analysis

Alibaba is the world's largest on-line trading platform, with higher sales than Amazon and eBay both combined together. Its 2012 syndicated loan was the initial substantial loan to get a Chinese technology company with few tangible assets.

Creative loan covenants asserted that the subsidiaries would retreat 100 per cent of the distributable profits for debt service.The loan was partially used for the buyback of Yahoo!'s stake in Alibaba. In the arrangement, Yahoo! would sell half its own stake back to Alibaba immediately and an additional 10 per cent during Alibaba's IPO in the next couple of years, and divest the rest sometime after that. Now, Alibaba believes it's time to tap the debt market to finish the payments owed to Yahoo! for the stock repurchase and so that you can pay off the $4 billion in loans it received in 2012. Emir Hrnji? And David Reeb are affiliated with National University of Singapore.

PUBLICATION DATE: June 04, 2014 PRODUCT #: W14192-PDF-ENG

This is just an excerpt. This case is about FINANCE & ACCOUNTING

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