State-owned Chinese Asset Manager Grabs 24% Stake in Ant Group’s Consumer Finance Spinoff

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One of China’s leading state-owned asset managers is set to grab a 24% stake in a consumer finance company launched by fintech giant Ant Group just following its restructuring at the behest of Chinese regulators.

China Cinda Asset Management has informed the Hong Kong stock exchange that it will obtain a 20% stake in Chongqing Ant Consumer Finance following the provision of a 6 billion yuan consideration.

Cinda will also acquire a further 4% equity stake in Chongqing Ant Consumer via its subsidiary Nanyang Commercial Bank.

The investment is part of a 22 billion yuan fundraising round that will see Chongqing Ant Consumer’s register capital more than triple.

The China Banking and Insurance Regulatory Commission (CBIRC) granted Ant Group a license for Chongqing Ant Consumer in April, after previously reprimanding the fintech giant for anti-competitive conduct, and calling for it to return to a focus on its original business of payments.

Chinese regulators scuppered Ant Group’s USD$37 billion initial public offering on the Shanghai and Hong Kong stock exchanges in early November 2020, just days prior to its scheduled launch.

They subsequently called for Ant Group to convert into a financial holding company to abet regulatory scrutiny, as well as for Alibaba-founder Jack Ma to dial back his control and involvement.

At the time of Chongqing Ant Consumer’s establishment Nanyang Commercial Bank held a 15% stake, and state-owned China Huarong Asset Management a 5% stake.

The capital raising will dilute their holdings, making Cinda the second-largest stakeholder in Chongqing Ant Consumer. Ant Group itself will have a 50% controlling interest in the consumer finance platform.