Alibaba’s Ant consumer finance unit to boost capital to $4.7 billion

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Alibaba’s Ant consumer finance unit to boost capital to $4.7 billion

In what could be contemplated as a sagacious move to restore consumers’ confidence following a flurry of regulatory probes into Chinese tech giant Alibaba Group Holdings’ fintech arm, Ant Group, the Hangzhou-headquartered largest digital payment platform in China would ramp up its capital by CNY30 billion or $4.71 billion from a prior CNY8 billion or $1.26 billion, while the fintech group also presented four new strategic investors, a regulatory filing with Hong Kong stock exchange released late on Friday had unveiled.

In factuality, latest move from Ant Group, which had to shelve its dual IPO proceedings last year following defamatory comments on China’s pro-CCP backed Government’s financial policy from Alibaba Group founder Jack Ma, came forth as the red-listed fintech company had been met with a tremendous scale of regulatory pressure to unit two of its most-profitable micro-loan businesses, Jiebei and Huabei, while the action would disable Ant Group’s regulatory flexibility and make it subject to capital requirements that conventional Chinese banks usually entail.

Nonetheless, it is yet to be seen on whether the latest move from Ant Group to boost up its capital by a substantial margin, had been tied to a merger of its two micro-loan units, suggested analysts.

China’s Ant Group boost up capital to $4.7 billion

According to the regulatory filing, China Cinda Asset Management, one of the China’s four largest asset managers which turned out to be a new investor for Ant Group, would lay off about CNY6 billion as a part of Ant Group’s latest course of action.

Followed by the deal, China Cinda would hold about a 24 per cent stake in the group, becoming the second-largest stakeholder in Ant’s consumer financing unit. Besides, the filing with Hang Seng regulatory authorities had unfurled that Ant Group would retain a majority 50.0 per cent stake in the unit.