Alibaba Group Holding Ltd said it will raise $3.2 billion through a zero-coupon convertible bond issuance as part of efforts to expand its cloud services operations and expand into international markets.
About 80% of the proceeds from the bonds will be used to build new data centers, upgrade technology and improve service quality to meet demand for cloud solutions.
The remaining funds will be used to improve its market presence and improve efficiency in the e-commerce sector.
The bonds carry a conversion premium of between 27.5% and 32.5% over Alibaba's US-listed share price.
The bonds will mature on September 15, 2032 and can be converted into shares of the company traded on the US market.
Alibaba's Hong Kong-listed shares rose about 2.3% to HK$146.1 after falling earlier, while US-listed shares fell yesterday.
However, the year-to-date performance shows strong gains for both stock lists.
Alibaba is one of the companies in China that is investing heavily in artificial intelligence (AI) with an investment commitment of 380 billion yuan or around $53.37 billion over the next three years.
According to the company's CEO, the investment in AI is starting to show tangible results and is expected to be a key driver of growth in its cloud services division.
