Ant Group's consumer finance unit to more than double capital to $2.62b

Ant Group's consumer finance unit to more than double capital to $2.62b

FILE PHOTO: A man walks past an Ant Group logo at the World Artificial Intelligence Conference (WAIC) in Shanghai, China July 8, 2021. REUTERS/Yilei Sun/File Photo

The consumer finance unit of China’s Ant Group will increase its registered capital to 18.5 billion yuan ($2.62 billion) from 8 billion yuan previously, in part by taking on new investors, an exchange filing released on Monday said.

Ant will invest 5.25 billion yuan as part of the capital injection to retain its 50% stake in the unit, Chongqing Ant Consumer Finance Co Ltd, according to the filing made by the unit‘s minority shareholder Yuyue Medical.

Among the new investors is Hangzhou Jintou Digital Technology Group, which is controlled by the local government of Hangzhou city, home to Ant’s headquarters. It will invest 1.85 billion yuan to become the second biggest shareholder with a 10% stake, the filing showed.

The planned capital increase would be a significant move for the unit, which has been under regulatory pressure to fold into itself Ant’s two lucrative micro-loan businesses, Jiebei and Huabei. That would make the fintech giant Ant subject to rules and capital requirements similar to those for banks.

It could also help Ant move closer to the end of its years-long regulatory-driven revamp and revive plans for its public market debut after its $37 billion attempt at a dual listing was derailed at the last minute in November 2020.

Other new investors include logistics and financial services firm Transfar Zhilian Co Ltd and Chongqing Rural Credit Investment Group, a firm backed by the local government of Chongqing city, where Ant’s consumer finance unit is based.

Yuyue Medical, Sunny Optical Technology Group Co Ltd, and Boguan Technology, a unit of gaming major NetEase Inc, will also take part in the capital increase, according to the Monday filing.

The unit had previously planned to boost its capital to 30 billion yuan, with 6 billion yuan coming from state-owned asset manager China Cinda Asset Management Co Ltd.

Cinda, which had held a stake in the unit via its Nanyang Commercial Bank Ltd subsidiary, in January however scrapped an agreement to buy a 20% holding due to pressure from state authorities, sources have told Reuters.

Following Cinda’s move, other investors that had previously agreed to the capital increase in the same month, including Yuyue Medical and Sunny Optical, said that they would also postpone their investments.


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