Alibaba Group Holding Ltd BABA-backed Ant Group plans to offer no-interest loans to employees who own illiquid stock options as it looks to boost employee morale after the suspension of its mega-IPO last year, Bloomberg reported on Monday.
What Happened: Ant told employees last month it would eventually go public and promised a “short-term liquidity solution” that would take effect this month. According to the Bloomberg report, the loans will be calculated based on a 2018 funding round when Ant was valued at $150 billion and will be backed by eligible employees’ restricted stock options.
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The options, known as Share Economic Rights with 5.53 shares each, will be priced at RMB 195 ($30.05) or RMB 35.26 a share, the report noted.
The move comes as the company attempts to halt attrition of employees due to rising discontent and the anticipated departures after it pays bonuses in April.
See Also: Why Is Alibaba Stock Surging Despite $2.87B Antitrust Fine?
What's Next: The company, which suspended buyback programs for current and departing staff last July amid preparation for the IPO, will announce details of the loan program in the next few days, as per Bloomberg.
A number of Ant employees have been granted restricted stock options, and these represent a significant portion of total compensation for some. The restricted stock options are usually subject to a four-year vesting schedule, with 25% free from the lockup upon the first anniversary and 25% every year thereafter, according to the newswire.
Price Action: Shares of Alibaba closed 1.19 higher at $232.08 on Friday.
See Also: Alibaba's Ant Group Can Still Be World's Biggest IPO, Says Chinese Investor
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