China Cinda abandons $944 million investment in Ant Group’s consumer finance unit

© Reuters. FILE PHOTO: A man walks past the Ant Group logo at the World Artificial Intelligence Conference (WAIC) in Shanghai, China, July 8, 2021.Reuters/Sun Yilei

(Reuters) – China Cinda Asset Management said on Thursday it planned to cancel a deal to buy a 20 percent stake in Ant Group’s consumer finance unit for 6 billion yuan ($943.83 million).

The investment will increase Cinda’s stake in Chongqing Ant Consumer Finance Co Ltd to 24%, making the asset manager its second-largest investor.

Cinda, through Cinda’s subsidiary Nanyang Commercial Bank Ltd, effectively owns a 15% stake in an Ant subsidiary. After the investment, the stake will be diluted to 4%.

“After further prudent commercial considerations and negotiations with (Chongqing Ant Consumer Finance), the company proposes not to participate in the share subscription,” Cinda said in a filing with the stock exchange.

Ant’s consumer finance unit is under regulatory pressure to include Jibei and Huabei, two of Ant’s lucrative micro-lending businesses, which would subject it to similar rules and capital requirements as banks.

Cinda, one of China’s top four state-owned asset managers, said the exit would not have any material impact on the company.

In a statement, Chongqing Ant Consumer Finance said it “fully respects investors’ business decisions”, adding that “under the guidance of regulators, the company will actively engage in discussions with investors … and ensure consumer rectification work.” . Financial business has been effectively carried out.”

($1 = 6.3571)

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