Alibaba Group Holding Ltd. is considering raising $20 billion via a second listing in Hong Kong after a record-breaking 2014 New York debut, people with knowledge of the matter said, a mega-deal that will bring China’s largest company closer to investors in its home country as US tensions escalate.

The e-commerce giant is working with financial advisers on the planned offering, the people said, asking not to be identified. Alibaba aims to file a listing application in Hong Kong confidentially as early as the second half of 2019, sources said. A second listing is intended to diversify its funding channels and boost liquidity, one of the people said. The plans are preliminary and could change, they added.

A successful deal will rival AIA Group Ltd’s 2010 IPO as Hong Kong’s largest-ever share sale, a triumph for a city that’s ceded many of China’s largest corporations to US exchanges. Alibaba had raised $25 billion in New York in the world’s largest initial public offering after struggling to persuade Hong Kong regulators to approve its unique structure, under which a coterie of partners decide board membership. Hong Kong’s exchange finally relaxed restrictions and granted the green light for dual-share classes last year, allowing internet services giant Meituan Dianping and smartphone maker Xiaomi Corp the right to issue stock with different voting rights.

The move also comes as Chinese companies grapple with rising tensions between Beijing and Washington and an increasingly hostile US government that’s slapped export curbs on Huawei Technologies Co. and is considering similar restrictions against a clutch of artificial intelligence firms. This year, games-streaming giant Douyu International Holdings Ltd postponed its IPO launch following market jitters over the trade war.

A large part of it is politics, especially because of the timing, said David Dai, a Hong Kong-based analyst at Bernstein. Another part of it is potentially better valuation in the Hong Kong market.

Alibaba declined to comment. Its New York-traded shares have slid more than 21 per cent over the year to Friday’s close, but at roughly $400 billion it still counts among the worlds 10 largest publicly traded corporations.

According to Bloomberg analysts, Alibaba’s potential $20 billion second listing in Hong Kong is more a homecoming than a fundraising, as it already had $29 billion cash as of March, and generated $22 billion operating cash flow in fiscal 2019. China-based funds, with better understanding of its business would get more access in Hong Kong, which the company had originally preferred for its 2014 IPO.

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