China Investment Corp (CIC), the mainland's US$300 billion sovereign wealth fund, is considering an investment worth at least US$2 billion in Alibaba Group.
The e-commerce giant is seeking capital to fund a share buy-back deal with US internet company Yahoo.
An international investment bank hired by Alibaba submitted a proposal to Beijing-headquartered CIC several weeks ago asking it to provide financial support to the Hangzhou-based company founded by mainland entrepreneur Jack Ma Yun.
People familiar with the situation told the South China Morning Post CIC is likely to buy Alibaba shares and bonds with a combined value of more than US$2 billion. CIC may also help bring in other institutional investors for similar stock-and-bond investments in Alibaba. No agreement has been reached yet.
Alibaba was not available for comment.
In May, Alibaba Group, the parent company of Alibaba.com, which was delisted from the Hong Kong market last month, agreed to purchase in stages Yahoo's 40 per cent stake in the group.