Alibaba Health, the healthcare unit of Alibaba (NYSE: Alibaba), will raise HKD 10 billion (USD 1.3 billion) by issuing 498.8 million new shares, according to a filing on Wednesday.
The company has priced each share at HKD 20.05 (USD 2.6), representing an 8.03% discount to the closing price on Tuesday.
About 80% to 90% of the proceeds will be used to develop its pharmaceutical and healthcare business, while the rest will be used to on the company’s digital infrastructure and innovative business. The latter includes information technology solutions for governments, hospitals, research institutes, and colleges.
The share sale comes at a time “when online healthcare consultation services have had a significant positive social impact during the COVID-19 pandemic”, said the company in the filing.
Alihealth generated RMB 9.6 billion (USD 1.4 billion) in revenue in the fiscal year 2020 ended March 31, up 88.3% year-on-year , mainly attributable to the rapid growth of its online drug sales and consumer healthcare business.
This article is part of KrASIA’s “China Brief” section, where KrASIA’s reporters will provide quick daily updates about the tech ecosystem in China.