ALIBABA Group, China's largest electronic commerce company, hired banks to raise as much as US$1 billion in an overseas initial public offering this year, four people familiar with the plans said yesterday.

Alibaba, 40 percent owned by Yahoo! Inc, picked Goldman Sachs Group Inc and Morgan Stanley for the IPO of its business-to-business unit, the sources said. The company may seek as little as US$700 million in the IPO, likely to be in Hong Kong, they said.

China's business-to-business e-commerce rose 39.5 percent to 629 million yuan (US$81.6 million) in the three months to December, 2005, over the previous quarter, according to Analysys International, a Beijing-based technology consulting firm. Alibaba, based in Hangzhou, commanded 68 percent of the market, Blooomberg News said.

"I expect Alibaba will use the money from a listing to make acquisitions because the e-commerce sector in China is still very fragmented with a lot of smaller companies," Steven Liu, a technology analyst at DBS Vickers Securities Ltd.

Alibaba may sell shares only in the more profitable business-to-business unit, known as Alibaba.com, two of the people said. Taobao, Asia's largest consumer e-commerce Web site, and Yahoo! China, both less profitable, may be excluded from the sale, they said. Deutsche Bank AG will also play a role in the transaction, the people said.

Porter Erisman, a Hong Kong-based spokesman for Alibaba, declined to comment on "market rumours." The investment banks also declined to comment.

Eight-year-old Alibaba was founded in the apartment of its English-language teacher-turned Chairman and Chief Executive Officer Jack Ma as a market place for businesses to trade goods.

Alibaba.com had sales of US$100 million in the first six months of 2006, matching its revenue for the whole of 2005. The company aims to reach 10 billion yuan (US$1.3 billion) of sales by 2009.

Source:佚名