(Yicai Global) May 23 -- Alibaba Health Information Technology, acquired by Alibaba Group Holding and its founder Jack Ma's investment firm in 2014, plans to raise HKD2.3 billion (USD289 million) by selling shares to associated companies.

The Hong Kong-based company will sell a total 303 million shares at HKD7.5 (96 US cents) each to Alibaba's wholly owned Ali JK Nutrition Products Holding and Antfin Hong Kong Holding, a subsidiary of Alibaba's fintech affiliate Ant Financial Services Group, AliHealth said in a statement today. The price is discounted 2.34 percent from the seller's [HKG:0241] closing price yesterday.

AliHealth plans to use the cash raised to pay off loans, fund business operations, expand to fulfill its previous investment commitments and make strategic acquisitions. It lost CNY92 million (USD13.3 million) in 2018 despite revenue more than doubling annually to CNY5.1 billion (USD738 million), according to its financial reports. It lost CNY109 million in 2017.

Ali JK will buy over 242 million of the shares up for grabs, taking its total holdings in AliHealth to around 3.7 billion shares, or a 30.8 percent stake. Antfin will buy 60.6 million shares to mark its maiden investment in the target, giving it a 0.5 percent stake.

Editor: James Boynton