Alibaba Group Holding Ltd. chairman Jack Ma Yun and vice chairman Joseph Tsai Chung-hsin plan to raise more than US$2 billion through a margin loan pledged against the firm’s stock, Bloomberg reported Friday.
The money raised may be used to fund Blue Pool Capital Ltd., the Hong Kong-based family office for Alibaba executives that Tsai set up, the report said, citing unnamed sources.
The loan may be announced as early as this month, after a lockup period on stock owned by Ma and Tsai expires on Sept. 21, it said. No final decision has been made and the deal may still fall through.
Both men are billionaires with considerable stakes in Alibaba, which poses a challenge in broadening their personal holdings without panicking Alibaba investors, Gil Luria, an analyst at Wedbush Securities in Los Angeles, was quoted as saying.
“Since Mr. Tsai said publicly on the last earnings call that he and Mr. Ma will not be selling shares at the lockup expiration, this may be their best way for diversifying their personal portfolio without breaking a promise,” Luria said.
In a margin loan, a borrower secures a loan by pledging an asset and typically agrees to hand over cash to the lender if the value of the collateral declines. The lender can usually sell some of the collateral if the borrower is unable to post cash.
Hangzhou-based Ma has a net worth of US$29.4 billion, and Hong Kong-based Tsai of US$4.3 billion, the Bloomberg Billionaires Index shows.
“Share financing is very common for founders and senior executives who hold such a strong belief in the future growth potential of their companies,” Jim Wilkinson, a spokesman for Alibaba, said Thursday.
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