Alibaba Group Invests $692M In Intime Retail

Beijing-based department store operator Intime Retail says Alibaba Group Holding Ltd. has agreed to invest HK$5.37 billion ($692.25 million) in the company, according to an announcement of Intime Retail.

Alibaba will pay HK$1.66 billion to buy 220.5 million shares at HK$7.53 apiece. The equity stake is equivalent to about 9.9% of the company’s enlarged shares. It will also subscribe to a HK$3.71 billion convertible bond, which if converted will give Alibaba no less than an additional 25% stake in Intime.

Intime previously received investment from Singaporean state investment firm GIC Private Ltd., whose stake will be diluted to 6.99% from 9.46% after the transaction.

Intime says it will use the net proceeds for new store openings, acquisitions of retail businesses, debt repayment and general working capital.

The two companies will also form a joint venture to develop shopping malls, department stores and supermarkets related to online-to-offline (O2O) business in China.

Alibaba and Intime will each hold 80.1% and 19.9% of the joint venture.

Founded in 1998, Hong Kong-listed Intime Retail operates 36 stores, including 28 department stores and eight shopping centers at the end of 2013.

According to Intime’s annual report, it generated an income of RMB4.5 billion, up 12.6% year-on-year, and a net profit of RMB1 billion, up 9.5% year-on-year in 2013.

Earlier this month, Alibaba invested US$215 million in U.S. video messaging app maker Tango and acquired 60% of Hong Kong-listed ChinaVision Media Group.

Caishen.Co - Primary Data for China Secondary Investment and Stock Markets