Alibaba: SME Loan Business Is Sold To Small And Micro Gold Clothing.

< p > August 13th news, < a href= "http://sjfzxm.com/news/index_cj.as" > group < /a > newly updated prospectus disclosed that the SME loan business and assets belonging to Alibaba group will be sold to the small and micro financial services group (hereinafter referred to as "small micro gold clothing"), and the consideration price is RMB 3 billion 219 million yuan plus annual fee.

< /p >

< p > according to the agreement at that time, Alipay should pay the intellectual property rights license fee and software technology service fee to Alibaba group, which is 49.9% of the pre tax profit of Alipay company.

When Alipay or its holding company is listed, it must give Alibaba group a one-time cash return of 37.5% of the total market value of IPO, with a repayment amount of not less than US $2 billion and not more than 6 billion US dollars.

< /p >

< p > Alibaba's new agreement on today's prospectus makes it clear that Alibaba group will share the pre tax profit of small and micro gold clothing instead of Alipay.

Correspondingly, Alibaba group's pre tax profit sharing has also been adjusted from 49.9% of Alipay's previous agreement to 37.5% of the small gold service group.

And when small gold clothing or Alipay IPO, Alibaba group has the right to continue to gain annual profit sharing under the supervision and permit, or to choose a one-time cash return equivalent to IPO's total market capitalization of 37.5%.

The new agreement also abolished the upper limit of $6 billion in one-time cash, and stipulated that the condition of IPO was $25 billion.

In this way, the one-time cash return of the small and micro payments to Ali group is at least $9 billion 375 million. The potential financial returns of Alibaba group and its shareholders, Softbank and YAHOO, will be significantly improved in the future.

< /p >

< p > updated prospectus shows that the new agreement clarifies the business relationship and business scope of Alibaba group and small and micro gold clothing as a "return" for small and micro gold clothing.

According to the non competition commitments of the two sides, Alibaba group shall not carry out financial services such as providing and distributing credit and insurance, providing investment management and banking services, payment processing services, leasing, financing leasing and related services, foreign exchange related products, distribution, brokerage services, distribution of securities, commodity futures, funds, derivatives and other financial products, and providing credit rating and credit reports, while small and micro gold services shall not engage in business undertaken by Alibaba group.

< /p >

< p > based on non competition commitments, Alibaba group has agreed to sell SME loans to small and micro gold services at a cash price of 3 billion 219 million yuan plus annual fee.

The prospectus shows that the cash consideration of the 3 billion 219 million yuan has a premium on the aggregate book value of the entities of the Alibaba SME loan business.

The annual fee is seven years, of which, from 2015 to 2017, the cost of the small and micro payments to the Alibaba group is equivalent to 2.5% of the daily average loan balance of the SME loans provided by the SME business entities. The annual fee collected from 2018 to 2021 is the same as the annual fee in 2017.

< /p >

The P > prospectus also disclosed that the original 2011 Alipay framework agreement was terminated after a new series of agreements were signed.

Alibaba group said in the prospectus that the new agreement will not only ensure that all parties share the long-term development of small and micro gold clothing, but also benefit the long-term development of small and micro gold clothing.

< /p >

< p > to Alibaba group and its shareholders YAHOO, Softbank and so on, the adjusted scheme will greatly increase its revenue. One of the important reasons is that the main body of its sharing has changed from Alipay to small and micro gold service groups including Alipay and other financial businesses.

In the first version of the agreement, Alibaba group and its shareholders share only the value of Alipay's growth.

However, with the development of a series of mergers and acquisitions, Alipay today is only an integral part of small and micro gold clothing.

In addition to Alipay, small and micro gold clothing also includes SME loans, zhong an online, Tianhong fund, recruit treasure and many other assets, as well as future possible network banking business.

< /p >

< p > the new agreement is clear that the valuation of eligible IPO of small and micro gold clothing needs more than 25 billion dollars, and the amount of financing is more than 2 billion US dollars.

According to the ratio of 37.5%, Alibaba group can get a one-time cash return of not less than $9 billion 375 million, which is nearly 4 times lower than the lower limit of $2 billion of the 2011 framework agreement.

< /p >

< p > as early as November 1, 2013, the small micro gold clothing group announced its own shareholding structure plan.

According to this structure, small and micro gold clothing will share 40% of the shares, as a small micro gold suit and Ali group staff share and inspire.

The remaining 60% of the shares will be used to introduce strategic investors in the future.

< /p >

< p > prospectus disclosure, in the future, if small and micro gold clothes are applied for and obtained written permission from regulatory authorities, the small and micro gold clothing will issue a 33% equity interest to exchange "Alibaba group's profit sharing and cash compensation rights".

If the regulatory body allows the Alibaba group to have a capital ratio of less than 33%, asset replacement will be carried out in the maximum proportion permitted by the regulatory authorities, and profit sharing and cash compensation will also be deducted in proportion.

< /p >

< p > this means that if the regulation allows, the Alibaba group may become shareholders of small and micro gold clothing as a strategic investor, thereby pforming the original economic benefits into a more direct and long-term equity interest.

< /p >

< p > but in Alibaba group prospectus, it is also emphasized that whether or not to execute the "share of profits" rights of Alibaba group with a direct shareholding of 33% is the premise of regulatory permission.

Alibaba group also made a risk note in the prospectus: "we believe that under the current regulatory requirements and operations, we will not get the necessary domestic regulatory approval for holding small and micro financial services groups. We can not guarantee that these regulatory requirements and operations will change in the short term."

< /p >

< p > the prospectus also reaffirmed that the direct and indirect shareholding ratio of Ma Yun in the small and micro gold clothing will not be higher than his shareholding ratio in Alibaba group (Ma Yun's shareholding ratio is 8.9% in Alibaba group), which means that no matter whether the future Alibaba group will become a shareholder of small and micro gold clothing, Ma will not get any additional benefits from the renewal of this agreement.

< /p >