Alibaba Pictures, the movie production division of Chinese E-Commerce giant Alibaba, announced its gigantic plans to raise a staggering, behemothic $1.6 billion through a share placement.
Alibaba plans to spend majority of this amount on acquisitions that would eventually bolster its presence in the growing Chinese film market.
A recent rally carried out by Alibaba nearly doubled the shares of the company. According to Hong Kong stock exchange filing, Alibaba Pictures plans to sell 4.2 billion shares at $2.90 each, which is around 13 percent less when compared to Monday’s close.
Alibaba Pictures established as a result of the acquisition of a majority 60% stake by Jack Ma’s group in March 2014 for $800 million and put Ma a direct incharge of the company.
Ever since its establishment, Alibaba pictures has been eyeing at opportunities for expansion. Earlier in March, Ma announced that Alibaba had also acquired an 8.8% stake in Enlight , one of China’s leading film and TV production companies, valued at $380 million.
In April, shares in Alibaba Pictures slumped after Alibaba announced that it was considering an asset injection in the film unit. Furthermore, it also announced plans to fold its online movie-ticketing business as well as its movie production crowdfunding business into Alibaba Pictures.
Alibaba says that it hasn’t considered any organization for acquisition yet but would looking for possibilities soon.