Chinese electronics retailer Suning Commerce Group published a private placement report, stating that the company will issue 1.927 billion new shares at the price of CNY15.17 per share, aiming to raise CNY29.085 billion net funds.
Taobao (China) Software, an affiliate of the Alibaba Group, will subscribe CNY28.233 billion Suning additional shares. On the completion of the subscription, Taobao will hold 1.861 billion Suning shares, accounting for 19.99% of the total shares of Suning, and this Chinese e-commerce company will become the second largest shareholder of Suning Commerce Group.
After the issuance of new shares, Suning's total shares will reach 9.31 billion. Zhang Jindong, chairman of Suning, will still be the largest shareholder of the company with 1.952 billion shares, accounting for 20.96% of the total shares.
Prior to this, Alibaba and Suning announced a strategic cooperation in August 2015. With the cooperation, Alibaba would make a strategic investment of about CNY28.3 billion in Suning to become the second largest shareholder of the latter. Meanwhile, Suning would invest CNY14 billion to subscribe no more than 27.8 million newly-issued shares of Alibaba.