Alibaba Group Holding Ltd is considering selling convertible bonds to raise about US$5 billion , people familiar with the matter said, following a US$1.75 billion offering by rival Chinese online retailer JD.com Inc this week.

Alibaba has spoken with investment banks about selling bonds that can be converted into US-listed stock, the people said, asking not to be identified discussing private information. The aim is to fund share repurchases and growth, the people said. 

An offering could come as soon as this week, though no final decisions have been made, the people said.

Alibaba’s Hong Kong-listed shares dropped as much as 6.6% on Thursday, the biggest intraday loss since Feb 8.

Alibaba needs capital to invest in its core businesses of commerce and the cloud, both of which have bled market share during a crackdown on the sector by Chinese authorities and subsequent internal turmoil. The company is leading the way in cutting prices for cloud and artificial intelligence (AI) services, while also starting to ramp up bets in AI, a hotbed of global investment activity. 

A representative of Alibaba didn’t respond to requests seeking comment.

Alibaba approved an expansion of a share buy-back programme earlier this year, adding US$25 billion in stock repurchases - one of the largest-ever in China. 

The Chinese company’s American depositary receipts have fallen 6.6% in the first three days of this week, trimming their year-to-date gain to 6.7% and leaving Alibaba with a market value of just over US$200 billion. 

Alibaba’s latest quarterly net income tumbled 86% from a year earlier, after an unexplained write-down for losses in its publicly traded holdings, which range from AI firm SenseTime Group Inc to brick-and-mortar chain Sun Art Retail Group Ltd. That came on top of heightened spending to ward off competitors.

JD.com’s convertible bonds are due in five years and have a coupon of 0.25%.

  - Bloomberg