Alibaba's finance arm plans 2016 initial public offering

Alibaba Group’s finance affiliate is planning an initial public offering next year following a private placement, details of which are not yet finalised.

Zhejiang Ant Small & Micro Financial Services Group runs China’s largest e-commerce payments business and has an estimated value of around $50bn.

A person familiar with the matter, who asked for anonymity, said that China’s National Social Security Fund has been invited to invest in Ant Financial.

Alibaba Chairman Jack Ma has controlled Ant Financial, including the Alipay payments business, since spinning off the finance operations into a new company in 2011, citing foreign ownership restrictions.

The spinoff of Alipay was a point of contention between Ma and key shareholder Yahoo! Inc., which said it wasn’t informed of the sale at the time, and led to the earlier 2011 agreement on compensation.

Under the public offering, employees, including Ma, would own the shares in Ant Financial not held by new investors and Alibaba, amounting to about 40%.

Ma will continue to hold voting rights to Ant Financial, though his holding will be reduced to a percentage not exceeding his Alibaba stake, the prospectus said.