One of the longest running issues about the future of Yahoo!, the troubled internet portal, is what it would do with its 39% stake in China e-commerce giant Alibaba, and its shares in Yahoo! Japan–a joint venture with Softbank. Yahoo!, which has appointed a new CEO and restructured its board, has owned both assets for years. They have been, however been locked up on its balance sheet, and were not liquid. They were of almost no use to the company if it wanted to increase cash on hand for M&A activity.
Yahoo! has been broadly criticized fo not liquidating the positions, but there have been disputes over what the positions are worth.
Now, according to The Wall Street Journal,
Chinese Internet giant Alibaba Group Holding Ltd. is in the process of raising a US$3 billion loan from around six banks to buy back the stake that Yahoo Inc. owns in the company, people familiar with the situation said Thursday.
The banks are
The six banks –Australia and New Zealand Banking Group Ltd., Credit Suisse Group AG, DBS Bank Ltd., Deutsche Bank AG, HSBC Holdings PLC and Mizuho Financial Group –are in the process of getting internal credit approval to underwrite the loan, which is said to have a tenor of three years with a yield of around 4%.
Despite the size of the loans, the position is estimated to be worth $5 billion to $6 billion. So Alibaba may fund the balance on its own. If the $3 billion is the total sum of the transaction, investors will be disappointed.
Top Gaining Stocks
Top Losing Stocks