SHANGHAI • Alibaba-backed YTO Express plans to go public via a 17.5 billion yuan (S$3.7 billion) merger with a listed clothing maker, becoming the latest courier seeking capital market funds to stay competitive in China's e-commerce boom.
China's mostly privately held express delivery firms are under pressure to spend heavily on logistics infrastructure and service upgrades to retain market share as tech firms like Alibaba Group propel the country's fast-growing e-commerce market.
Clothing maker Dalian Dayang Trands said in an exchange filing on Tuesday, after markets closed, that it would buy YTO Express through an asset swap and share issue, resulting in a backdoor listing on the Shanghai bourse for the courier.
The company said it will transfer its assets to YTO Express' shareholders under the deal. As a result of the transaction, which will require regulatory approval, the shareholders will ultimately own Dayang Trands, it said.
YTO did not reply to requests for comment yesterday. YTO's deal follows that of rival Shentong Express, which announced last December a 16.9 billion yuan reverse takeover deal with a valve maker listed in Shenzhen.
Such back-door listings are becoming popular due to the lengthy waiting time involved in China's initial public offering (IPO) process.
YTO, which was founded in 2000, posted net profit attributable to shareholders of 717 million yuan last year, down from 747 million yuan in the previous year.
Alibaba and Yunfeng Capital, a fund backed by Alibaba's founder Jack Ma, own a stake in YTO Express through a strategic investment deal.
Dayang Trands has suspended trading in its shares since early January, citing potential major asset restructuring.