While contending with a slumping stock price, Alibaba is seeking a reported $4 billion loan from at least eight banks. According to multiple reports, the China-based e-commerce giant intends to use the cash to help fund expansion plans, which include a fresh round of acquisitions. Bloomberg reported that the banks have started marketing a $3 billion loan to other lenders. Should demand warrant, the loan size could be increased.
Alibaba has been making acquisitions lately as it strives to maintain its level of dominance in an increasingly competitive marketplace. China’s largest online shopping company could spend up to $38 billion in 2016 to fend off Internet competitors Tencent Holdings Ltd. and Baidu Inc., analysts said late last year.
The spending would follow a 2015 in which the three companies were part of $30 billion worth of announced acquisitions. Alibaba’s investments included buying media assets like the English-language South China Morning Post, which the company plans to use to generate what it has described as fair and accurate press coverage of China.
While aggressive on the acquisition front, Alibaba’s stock price has fallen 20% in the last year, dropping below its initial public offering price of $68. Slowing growth, in part a result of China’s sluggish economy, has been a significant factor in the decline. In response, Alibaba Chairman Jack Ma and Vice Chairman Joseph Tsai are using their own money to make a $500 million share purchase.