By P.R. Venkat

Alibaba Health Information Technology Ltd. is planning to raise 9.96 billion Hong Kong dollars ($1.29 billion) in net proceeds through share placement, proceeds of which will be used toward business development.

The company, a unit of Alibaba Group Holding Ltd., will place 498.75 million new shares at an issue price of HK$20.05 each, Alibaba Health said Wednesday.

The shares are being placed at an 8.03% discount to Tuesday's closing price of HK$21.80 each.

About 90% of the proceeds from the placement will be used to develop the company pharmaceutical and healthcare omni-channel business and medical and healthcare services business.

Part of the proceeds will also be used toward developing the company's digital infrastructure, the company said.

Shares will be placed to at least six independent investors.

Credit Suisse and Citigroup are acting as the placing agent for Alibaba Health. 



  Write to P.R. Venkat at venkat.pr@wsj.com