Interpretation: The four questions about the reform of the equity structure of small micro-gold clothing

With the small Micro Financial Services Group (hereinafter referred to as "small micro-gold") Restructuring of equity structure, 2011 "Alipay Equity Event" left the biggest suspense final dust settled.

By Ali's small loan and Alipay business integration of small micro-gold clothing group announced today the company's new shareholding structure. According to the new structure, small micro-gold clothing will be 40% of the shares to the small micro-gold clothing group and Ali Group staff as an equity incentive. The remaining 60% per cent will be used to introduce strategic investors in the future.

This is the first time the equity structure of small micro-gold clothing surfaced. It is noteworthy that Mr Ma's personal holdings in small micro-gold will not be higher than his shares in the Ali Group's shareholding ratio of 7.3%. And that part of Mr Ma's stake is 40% of the employee's holdings.

"Alipay Equity event" once let Ali group and Ma Yun's personal reputation seriously damaged. Although Ali and Yahoo finally signed the solution, but Ma Yun and Ali founder of Shei, respectively, holding Alipay holding parent company Zhejiang Alibaba E-commerce Co., Ltd. (hereinafter referred to as "Zhejiang Ali Electric Company") 80%, 20% of the shares. Such a shareholding structure so that Ma Yun has been unable to get rid of the "pay treasure into their own pockets," the question, and even scold the sound.

The reform of the small micro-gold-clothing is Ali and Ma Yun "self-proof innocence" of an attempt. In the process of equity reform, small micro-gold clothing group will pay treasure of the parent company, namely, Zhejiang Ali Electric Company as the main body to build. In other words, the original Ma and Shei each shareholding 80%, 20% of the structure will no longer exist, replaced by the staff holding 40%, external investors shareholding 60% of the structure.

But there are still a lot of questions about the equity stakes in small micro-gold suits. For example, in the small micro-gold reform in the equity, Yahoo, SoftBank, such as the interests of Ali shareholders will be involved? Small Micro Gold Clothing group independent of Ali Group, why Ali Group employees can enjoy small micro-gold clothing equity incentive? More distant, the future of the small micro-gold clothing outside investors may come from which institutions ...?

Ali Group and small micro-gold clothing on the above issues made some explanations. Sina Science and technology will combine the official explanation and the interview obtains the information, to the small micro gold suits this stock right transformation the doubtful points carried on the comb.

1. What is the relationship between Alipay and the small Micro Financial services group?

Alipay Official reply: Small Micro Financial services group to pay Bao's parent company, Zhejiang Alibaba E-commerce Co., Ltd. as the main body to build. In addition to Alipay, small micro-gold clothing also owns 19.9% of the stake in security insurance, as well as Zhejiang Alibaba Micro-Loan Co., Ltd. 20% of the stake (the remaining shareholders of the small loan company also includes Alibaba Group and other external shareholders), the investment in the Tianhong fund has been approved by the regulatory authorities, will also have a stake in the

A 40% stake will be used for all employee equity incentives, including a one-time grant of November 1, 2013, future performance incentives, and an equity incentive to attract talented people in the future. The adjustment of the shareholding structure will be implemented gradually within the framework of relevant laws and regulations. Details of implementation will be announced at the appropriate time.

Interpretation: In May 2011, Alibaba Group, without the approval of the first major shareholder Yahoo, transferred the ownership of the company's Alipay to the Zhejiang Ali Electric Company. The company is owned by Jack Ma, chairman of Alibaba's board, and one of Alibaba's founders, Shei 80% and 20% respectively.

This March, Alibaba Group began to set up a small micro-financial services group, the corresponding entity company is Zhejiang Ali Electric Business Company. Ali small Micro by the original Alipay, Ali small loans and other business development, after the group mainly includes payment, small loans, insurance, security, financial five business direction.

Small micro-gold take the reform of the stock right to Zhejiang Ali Electric Company as the main body to build. This means that, in Zhejiang Alibaba Electric Co., Ltd., the original Jack Ma and Shei each shareholding 80%, 20% of the structure will no longer exist, replaced by the staff holding 40%, external investors shareholding 60% structure. Because Alipay is from Zhejiang Ali Electric Company 100% Holding, so after the reform of the equity, Alipay is also the corresponding is not the name of Ma Yun and Shei.

According to the current public information to speculate, Ali small micro-finance group has at least five subsidiaries. In the small loan business, Ali previously registered in Zhejiang and Chongqing two companies, the two companies have accumulated lending has reached 130 billion. And Alipay is also a small micro-gold clothing group 100% holding subsidiaries. Guarantee business, "Prudential Financing Guarantee Co., Ltd." was established in Chongqing in 2012, the legal representative for Ma Yun, registered capital of 300 million. Finance, Alipay in early October just spent 1.18 billion holdings of Tianhong fund.

2, the reform of the stake in Ali Group had previously on the payment of equity changes and Yahoo, soft silver agreement reached? Do you need soft silver and Yahoo approval?

Small micro-Gold Service official reply: Small micro-gold clothing and Yahoo and SoftBank have no equity relationship, the employee equity sharing plan is a small micro-gold to share the structure of the adjustment, do not need to pass the approval of Yahoo and SoftBank, will not affect the Ali group, Yahoo and SoftBank on the payment of equity changes reached agreement.

Interpretation: "Alipay equity transfer" After the incident occurred two months, Yahoo and Ali on the payment of equity disputes signed a settlement agreement. The deal is actually the final solution to the "Alipay stake" incident, and Ali has to promise a certain amount of commercial benefit to Yahoo's biggest shareholder.

Under the agreement, Alipay's holding company promises to give Ali Group a one-time cash return on the listing or other "liquidity issues". This amount of return will need to be 37.5% of the total market value/equity values for Alipay "cash out", with a return amount of not less than USD 2 billion and no more than 6 billion U.S. dollars. In addition, Alipay's holding company has pledged to pay 49.9% of pre-tax profits to Alibaba Group as an intellectual property licensing and software technology service fee before "cash out".

From a legal point of view, the settlement agreement has actually given a rest to the Alipay dispute, only for follow-up implementation. But the following two years, the Alipay incident almost became Ali Group business reputation and the personal reputation of Ma Yun a "stain." Even this year the market in the review of Ali group listing matters, there is still a sound that the Alipay event will have a negative impact on Ali's listing. This kind of public pressure can be said to promote the small micro-gold suit to reform the most direct power of equity.

3, why the equity structure of the year Alipay is Ma Yun shareholding 80%, Shei shareholding 20%? Do two people benefit from a change in equity?

Small Micro Gold Service official reply: 2011, Zhejiang Alibaba Electronic Commerce Limited Company's shareholding structure is Ma Yun and Shei respectively hold 80% and 20%. The shareholding structure was designed to meet the relevant regulatory requirements at the time, ensuring that Alipay was licensed. The incident had aroused much concern and discussion, including speculation about Mr Ma's personal motives.

In fact, over the past 2 years, we have never stopped exploring the ownership structure. We believe that a healthy, efficient and sustainable equity structure should be created and shared with our employees, created and shared with our partners, created and shared with our customers and our ecosystems. Therefore, we set the small micro-gold clothing target equity structure is: small micro-gold clothing and Alibaba Group of all staff accounted for 40%, the future step-by-step introduction of strategic investors accounted for 60%. Mr Ma, who is a member of his staff, will not hold a higher percentage of his holdings in small micro-gold suits than he does in the Alibaba Group.

Ma Yun and Shei previously held a small micro-gold to take shares are a transitional arrangement. In addition to the huge criticism and the pressure of public opinion, Ma Yun and Shei will not gain any benefits in this adjustment process.

Interpretation: In June 2010, the central bank promulgated the "non-financial institutions to pay services management measures" to pay institutions to provide the identity of the investor. The most sensitive of this provision is the issue of foreign capital status of the investor. The central bank said that the scope of business of foreign-funded payment institutions, qualifications and proportion of foreign investors should be separately stipulated by the PBC for approval by the State Council.

The timing for the regulation of the payment services of non-financial institutions is precisely when the central bank plans to issue the first instalment of Third-party payment licences. Mr Ma therefore believes that the central bank signal has clearly indicated that at that time, Yahoo and other foreign shareholder Alipay may not be the first time to get third-party payment licences. Assuming so, this to Alipay business, the consequences of "unimaginable".

As a result, Ma Yun without Yahoo and other major shareholders in the case of formal permission, will pay a stake in the treasure transfer to the Zhejiang Ali Electric Company, the company by Ma Yun and Shei respectively hold 80% and 20% of the shares.

4. Who is the strategic investor to be introduced for the remaining 60% shares?

Small micro-Gold Service official reply: We hope to introduce step-by-step strategic investors, is the concept of consistent, culturally similar and willing to work with small micro-gold group long-term common development of investors. We have not yet considered the specific list of strategic investors and have no specific timetable.

Interpretation: Compared with Ali's electric business, the small Micro Financial services group's business is still in the initial stage. Small micro-gold 60% shares used to introduce external investment also shows that the income from Alipay and Ali's small loan business has not been able to support the operation of the entire small micro-gold service-especially the future expansion of business.

Combined with Ali's previous fund-raising experience, the next investor in the small micro-gold suit could come from three forces:

A, Commercial Bank; last year, Ali lent to domestic and foreign banks, including the National Development Bank, Citigroup and Credit Suisse, to buy back the shares held by Yahoo. Small micro-gold service and the banking business itself complementary and synergistic effect, and Alipay and Ali small loan business itself also need to rely on banks, so the bank capital may be in the future into the small micro-gold clothing Group One of the forces.

B, PE/VC in Ali last year's financing, Ali existing shareholders Silver Lake Capital, DST and Temasek Holdings have been involved. In addition, Ali raised the repo money by issuing preferred shares and common stock. CIC, China Bank's equity investment subsidiary, PE Investment company Boyu Capital and Citic Capital were all subscribed.

C, Ma Yun Social circle, Ma Yun's personal circle of communication itself is a "capital circle." 2010, Ma Yun and mass Media founder Shong jointly launched the establishment of the Yunfeng Fund. The fund later played an important role in the 2011 Ali group employee share repurchase. And Sequoia, Giants and other institutions are also through the form of investment Yunfeng to participate in the purchase of employee shares.

As a result, the Yunfeng fund may still play a similar role in the financing of future small micro-gold suits.

New Hope Group chairman Liu, giant Network chairman Shi Yuzhu, Yintai Investment Chairman Shen, and so on more than 10 entrepreneurs are also Yunfeng fund sponsors. Ma Yun has pulled to set up a "rookie network" this year, so Ma's friends may also be small micro-gold clothing potential investors in the future.