SINGAPORE—The consumer-finance arm of China’s Ant Group Co. is planning to raise the equivalent of $1.5 billion in new capital, scaling back its fundraising ambitions after a large state-backed investor backed out of a previous plan.
Chongqing Ant Consumer Finance Co., a company that the financial-technology giant set up in mid-2021 to house its personal-lending business, is planning to increase its registered capital to 18.5 billion yuan, equivalent to $2.6 billion, from 8 billion yuan, according to regulatory filings from some of the companies taking part in the capital raise.
Last December, the Ant unit had said it planned to raise more than $3 billion to help it make loans, with a large chunk of that money coming from
China Cinda Asset Management Co.
, a state-owned financial institution.
Not long after, Cinda decided against participating in the capital raise, forcing Ant to go back to the drawing board. Yufu Capital, an investment firm owned by the Chongqing local government, also backed out of the plan.
Jiangsu Yuyue Medical Equipment & Supply Co., a Shenzhen-listed company that was involved in the earlier plan, said Monday that it and six other participants will contribute to the Ant unit’s new fundraising plan.
Ant, controlled by billionaire Jack Ma, owns 50% of its consumer-lending arm, and is pumping in the equivalent of $739 million in the latest raise. The other investors taking part include a unit of Hong Kong-listed electronics-parts manufacturer
Sunny Optical Technology (Group) Co.
, as well as existing and new shareholders of the consumer-finance business.
Ant, which operates the ubiquitous mobile payments network Alipay, makes unsecured loans to millions of Chinese consumers through a pair of lending services called Huabei, which means “just spend,” and Jiebei, which means “just borrow.” The two services are now housed within the consumer-lending unit, which can extend credit from its own balance sheet or work with banks to make loans jointly. Alipay users also have the option to obtain loans that are fully funded by banks.
According to the latest filings, Chongqing Ant Consumer Finance posted the equivalent of around $156 million in after-tax profit for the first nine months of 2022, on revenue of about $452 million.
Ant has been undergoing a lengthy restructuring and business overhaul, which began after the company was forced by Chinese regulators to call off its blockbuster initial public offerings in Hong Kong and Shanghai in late 2020.
As part of that overhaul, Ant has had to fall fully in line with Chinese financial regulations, improve its corporate governance and obtain licenses for its main businesses. Ant is also planning to turn itself into a financial-holding company overseen by China’s central bank.
—Rebecca Feng contributed to this article.
Write to Clarence Leong at [email protected]
Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8
For all the latest Technology News Click Here
For the latest news and updates, follow us on Google News.
