Ant Group’s Consumer Finance Unit to Boost Its Capital to $4.7 Billion, Introduce New Investors

The consumer finance arm of China’s Ant Group will raise the company’s capital from CNY 8 billion (about Rs 9,434 crore) to CNY 30 billion (about Rs 35,377 crore), and introduce 4 new strategic investors, a statement released on Friday said. stated in the exchange filing. ,

Unit, Chongqing Ant Consumer Finance, is under regulatory pressure to fold Ant This includes Jibei and Huabei, two lucrative micro-lending businesses, which would make it subject to the same rules and capital requirements as banks.

China Cinda Asset Management, one of the company’s new investors and one of the country’s four largest state asset managers, said it would invest CNY 6 billion (about Rs 7,075 crore) as part of the exercise.

Following the deal, China will become the second largest shareholder in the Cinda consumer financing unit with a 24 percent stake, including a 20 percent stake held directly and a 4 percent stake held by Nanyang Commercial Bank, a subsidiary of Cinda.

Ant will retain a 50 percent stake in the entity, Cinda’s filing to the Hong Kong Stock Exchange showed.

The filing also disclosed the introduction of three other strategic investors in Ant’s consumer financing arm, including Sunny Optics, Boguan Technology, a unit of NetEase and Yufu Capital, a local investment arm of the Chongqing government.

Last month, Ant said it was seeking to liquidate part of its short-term consumer lending business Jibei, as it pursues a regulator-led restructuring.

© Thomson Reuters 2021