ALIBABA Group Holding Ltd, China's biggest e-commerce company, has agreed to borrow US$8 billion from nine banks partly to refinance debt at a lower cost, according to a person familiar with the matter.

Australia & New Zealand Banking Group, Citigroup Inc, Credit Suisse Group, DBS Bank, Deutsche Bank, HSBC Holdings Plc, JPMorgan Chase & Co, Mizuho Corporate Bank and Morgan Stanley will lend the funds, according to the person. Florence Shih, a spokeswoman for Alibaba in Hong Kong, declined to comment on the financing.

The Hangzhou-based company, formed in 1999 as an online marketplace for Chinese companies, will use US$4.8 billion of the loans to refinance debt, US$800 million to buy back preferred shares from Yahoo! Inc, and the rest for corporate purposes, the person said.

The loans come amid speculation the company is preparing for an initial public offering after founder Jack Ma said in June that the company could sell shares in an IPO within five years.

"These are all necessary procedures that the company needs to take before it takes the group public," said Alex Wang, an analyst at Internet consulting group iResearch in Beijing. "Alibaba has had great demand for funding."

The company this week agreed to pay US$586 million for an 18 percent stake in Sina Corp's Weibo, China's largest Twitter-like service. Alibaba has the option to increase its stake to 30 percent at "a mutually agreed valuation," according to a statement.

Ma, who started developing the company's mobile business three years ago, hasn't been able to keep pace with Tencent Holdings Ltd and its WeChat messaging service for customers who access the Internet through mobile devices.

Buying a stake in Weibo, with its 503 million registered users, may boost Ma's efforts to compete with his Shenzhen-based competitor in making money from those platforms.