China's state-owned asset manager Cinda to acquire 20 percent of Ant Group's con...

China's state-owned asset manager Cinda to acquire 20 percent of Ant Group's consumer finance unit

China's state-owned asset manager Cinda to acquire 20 percent of Ant Group's consumer finance unit

Aron Chen

posted on December 24, 2021 10:30 pm

Incorporated in June this year, Chongqing Ant Consumer was designed to fold Ant Group’s two micro-loan businesses Jiebei and Huabei into one entity as a part of the regulators’ efforts to restructure Jack Ma’s fintech empire under regulatory supervision.

China Cinda Asset Management, one of China’s largest state-owned asset managers, will invest CNY6 billion to acquire a 20 percent stake in Chongqing Ant Consumer, the consumer credit unit of Ant Group, according to a document filed to the Hong Kong stock exchange on Friday.

Upon completion of the deal, Ant Group will retain a 50 stake in the unit and Cinda will become the second biggest shareholder with a 24% stake in Chongqing Ant Consumer, including a direct hold of 20% stake and a 4% stake held by Nanyang Commercial Bank Ltd, a Cinda subsidiary.

The capital injection will also bring three other new shareholders, including Sunny Optics, Boguan Technology, a unit of Chinese gaming giant NetEase Inc, and Yufu Capital, a local investment arm of the Chongqing government.

Meanwhile, the existing shareholders of Chongqing Ant Consumer – Cathy United Bank China, Contemporary Amperex Technology (CATL), China TransInfo Technology and China Huarong, the country’s largest bad load manager– will offload their shares.

Incorporated in June this year, Chongqing Ant Consumer was designed to fold Ant Group’s two micro-loan businesses Jiebei and Huabei into one entity as a part of the regulators’ efforts to restructure Jack Ma’s fintech empire under supervision.

Since Jack Ma’s speech at the Bund Finance Summit in Shanghai, China’s regulators have been growing increasingly concerned about the sizes of Ant’s fintech giants and have proposed tighter rules to regulate fintech products over the past year.

Regulators have also investigated a number of other fintech products on the market, leading to companies including Ant, NetEase Tencent to suspend their asset management businesses or remove many online deposit products from their platforms accordingly.