One of China’s largest state-owned asset managers will control a 24% stake in consumer finance company Ant Group, after participating in a Rmbn 22 billion ($3.5 billion) fundraising round. triple the registered capital of the company.
China Cinda Asset Management, owned by the country’s Ministry of Finance, said in a statement to the Hong Kong stock exchange that it would contribute Rmb6 billion, giving a 20% stake to Chongqing Ant Consumer Finance. Cinda will effectively hold 4% through a subsidiary, Nanyang Commercial Bank.
Ant is controlled by Jack Ma, the internet mogul involved, and has been pressured by Chinese regulators to increase its capital base and introduce state investors since its initial public offering. they are the world’s largest $37 billion, blocked just days before launching in November 2020.
Ma, once a frequent performer at international and Chinese conferences, has largely disappeared from public view since Ant’s IPO was cancelled. Ma was spotted vacationing on her luxury yacht in Spain in October first confirmed overseas trip since Ant and Alibaba, his flagship e-commerce unit, have been targeted by regulators.
Ant already Licensed for China’s banking regulator’s Chongqing-based consumer finance unit in April.
When it was established, Nanyang Commercial Bank held a 15% stake in the unit and China’s state-owned Huarong Asset Management Company held another 5%.
Both Nanyang and Huarong will be diluted by the capital raise, which will make Cinda the second largest shareholder of the unit. Ant Group will retain control of a 50% stake in the company.
In its statement, Cinda said the investment will help it gain a stronger footing in China’s booming online consumer credit industry, by allowing it to “work closely with leading provider of consumer finance”.
At its peak, Ant’s consumer finance business issued about a tenth of China’s unsecured consumer loans through its Alipay app. The group’s state-owned banking rivals argue that before the government’s crackdown Jack Ma’s Empire Over the past year, Ant has unfairly benefited from capital reductions and other regulatory requirements.
Cinda has established herself as an increasingly important arm of the state.
In addition to the substantial stake the company will hold in Ant’s consumer finance unit, a Cinda representative will also serve on the risk management committee set up by China Evergrande, the regional real estate developer. Highly indebted private sector was recently declared “limited default” by Fitch Ratings.
In contrast, Huarong has stretched from one crisis to another this year. In January, its former head, Lai Xiaomin, was Enforcement for alleged corruption. He had been sentenced to death by a court in the port city of Tianjin just three weeks earlier.
In August, Huarong announced a loss of $16 billion and said it would receive an unspecified amount strategic investment from other state-owned financial firms including Cinda.
Additional reporting by Ryan McMorrow in Beijing
https://www.ft.com/content/97b3cd0b-7ef4-4152-80c8-8c92e30f5482 China Cinda holds a 24% stake in Ant’s consumer credit unit