Ant Group’s Consumer Finance Restructuring Hits Speedbump as State Firm Decides It Won’t Invest

Ant Group Co. Ltd.’s consumer finance unit is adjusting its plan for a 22-billion-yuan ($3.5 billion) funding round after a state-owned bad-debt manager pulled out.

China Cinda Asset Management Co. Ltd. announced Thursday it had withdrawn from the share subscription agreement that would have seen it inject 6 billion yuan into Chongqing Ant Consumer Finance Co. Ltd. The decision came after “further prudent commercial consideration and negotiation,” Hong Kong-listed Cinda said.

This could add difficulties to the unit’s planned — and ordered — takeover of Ant Group’s consumer lending businesses, as it first must increase its registered capital to meet regulatory requirements.

Ant Consumer Finance told Caixin that it respects Cinda’s decision. The company will, under the guidance of regulators, negotiate with relevant investors to settle on a new funding plan as soon as possible and ensure that the rectification of Ant Group’s consumer credit business is carried out.

The original deal would have boosted Ant Consumer Finance’s registered capital from 8 billion yuan to 30 billion yuan, according to a Cinda filing to the Hong Kong Stock Exchange in December. The distressed-asset manager would have held a 24% stake in Ant Consumer Finance, if the deal went through.

Source: Caixin Global

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