(Yicai Global) May 15 -- Alibaba Group Holding has invested CNY4.4 billion (USD635 million) in Chinese furnishings shopping mall operator Red Star Macalline and the pair will work together on advancing the sector.
The Hangzhou-based tech giant subscribed to all exchangeable bonds issued by Shanghai-based controlling shareholder Red Star Macalline Holding Group today, it said in a statement.
The pair will cooperate in home improvement and furnishings shopping malls, shopping centers and other business areas, and penned a cooperation framework agreement today.
The Shanghai Stock Exchange approved RSM's plan to issue non-public exchangeable corporate bonds of up to CNY15 billion last year. The firm issued the first phase of convertible bonds with a term of five years with an initial agreed conversion price of CNY12.3 (USD1.8) per share.
The company's share price [SHA:601828;HKG:1528] closed up 3.4 percent at CNY12.2 in the in China's A-share market today, with a market value of CNY4.3 billion. Its closing price is lower than the conversion price. Alibaba will gain A-shares that are equivalent to 10 percent of RSM's total share capital if the bonds are converted to stocks.
The company directly manages a total of 364 malls spanning 199 cities in 29 provincial regions as of the first quarter this year.
Editor: William Clegg