Ant Group Co.’s consumer finance unit is raising 10.5 billion yuan ($1.49 billion) in a scaled-down capital boost from investors after China Cinda Asset Management Co. unexpectedly backed out of its investment plan this year.
(Bloomberg) — Ant Group Co.’s consumer finance unit is raising 10.5 billion yuan ($1.49 billion) in a scaled-down capital boost from investors after China Cinda Asset Management Co. unexpectedly backed out of its investment plan this year.
A subsidiary of Sunny Optical Technology Group Co. will take 1.1 billion yuan of Chongqing Ant Consumer Finance Co.’s capital, for a 6% stake, according to an exchange filing Monday. Jiangsu Yuyue Medical Equipment & Supply Co. plans to add 524 million yuan, taking a 4.99% stake. Ant Group will contribute 5.25 billion yuan to retain its 50% holding, while a group of other backers are also investing, statements show.
The investment proposal is still pending regulatory approval, the filings added.
Cinda Asset Management, one of China’s bad debt managers, withdrew its plan to invest 6 billion yuan for a 20% stake in the consumer finance giant in January, without disclosing a reason. At the time, Chongqing Ant was planning to raise about 22 billion yuan to boost its capital to 30 billion yuan. The finance unit combines the company’s most lucrative online lending operations, Huabei and Jiebei.
Jack Ma’s Ant Group has been restructuring its operations, including beefing up capital, curbing consumer lending, and shuffling its management. In a filing in July, Alibaba Group Holding Ltd. reiterated that Ma “intends to reduce and thereafter limit his direct and indirect economic interest in Ant Group over time” to a percentage that doesn’t exceed 8.8%.
China’s campaign to rein in its tech businesses kicked off with snuffing out Ant’s planned $35 billion initial public offering in late 2020. The crackdown snowballed into an assault on every corner of China’s technosphere as Beijing seeks to end the domination of a few heavyweights and create a more equitable distribution of wealth.
–With assistance from Charlotte Yang.
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