Del zhang, Former Vice Premier of the People's Republic of China

Hong Kong, April 1 : Chinese multinational technology company Alibaba Group Holding has said the company will decide whether to retain control of individual businesses after they go public, Nikkei Asia reported.According to Nikkei Asia, this comes as the first indication since the company announced its structural overhaul that it could give up control of one or more compes entirely.Alibaba on Tuesday announced that it will split into six new businesses, with each unit independently operated and Alibaba as the largest shareholder. Under the plan, all units except Taobao Tmall Commerce Group, Alibaba's core source of revenue, will be able to seek external financing and pursue an initial public offering."After going public, we will continue to evaluate the strategic importance of these compes to Alibaba, and on that basis, we will decide whether or not to continue to retain control," Chief Financial Officer Toby Xu said in a conference call with analysts on Thursday, Nikkei Asia reported."That will be an important strategic consideration," he said.At present, more than two-thirds of Alibaba's revenue comes from China-based e-commerce, while the other five business units generate some three per cent to eight per cent of the group's total revenue each.During the call, the company's Chief Executive Del Zhang said that the biggest difference between this restructuring and previous ones is that Alibaba has grown into a much larger and more complex orgzation."We have a wide range of businesses. ... Therefore, this reorgzation is more necessary than any previous one, but it's also more challenging. But we do believe that this new orgzational transformation will allow all of our businesses to become more agile," Zhang said, as quoted by Nikkei Asia.Zhang said Alibaba has been laying the groundwork for the transformation over the past few years, and one of the reasons that they chose to announce it in March is because they are beginning a new fiscal year in April.Alibaba Group will act as a holding company for the six groups, and as the controlling shareholder. The Alibaba board will retain control over the boards of these new compes."However, the nature of the relationship will change. Alibaba will be more in the nature of an asset and a capital operator than a business operator in relation to the business group compes," Zhang said, according to Nikkei Asia.Credit company Moody's views Alibaba's restructuring as credit positive in the near term, but says the long-term effects will require monitoring.The credit rating agency in a report said that as the six business units begin to operate more independently over time, they will be able to make decisions more quickly and react to competitive pressure more nimbly. There will also be more room for them to choose partners that best service their needs. These partners can be internal or external, with different terms and conditions, but the net result of the change is uncertain, the report said."In addition, the restructure could reduce regulatory risks and ease scrutiny after the Chinese government has cracked down on technology compes in the past few years. The looser connections between the business units is in line with the regulatory stance of encouraging competition," Moody's said.Disclaimer: This post has been auto-published from an agency feed without any modifications to the text and has not been reviewed by an editor

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