China's Cinda scraps $944 mln investment into Ant's consumer finance unit (updated)

China Cinda Asset Management

14/01/2022 02:02

(Adds Chongqing Ant Consumer Finance comment)
    Jan 14 (Reuters) - China Cinda Asset Management  1359.HK 
said on Thursday it plans to scrap an agreement to buy a 20%
stake in the consumer finance arm of Ant Group, worth 6 billion
yuan ($943.83 million).
    The investment would have increased Cinda's interest in
Chongqing Ant Consumer Finance Co Ltd to 24%, making the asset
manager its second-biggest investor. 
    Cinda effectively owns a 15% stake in the Ant-affiliated
firm through Nanyang Commercial Bank Ltd, a Cinda subsidiary.
The stake would have been diluted to 4% after the investment.
    "After further prudent commercial consideration and
negotiation with (Chongqing Ant Consumer Finance), the company
proposed not to participate in the share subscription," Cinda
said in a filing to the stock exchange. 
    Ant Group's consumer finance arm is under regulatory
pressure to fold Ant's two lucrative micro-loan businesses
Jiebei and Huabei into it, which would make it subject to rules
and capital requirements similar to those for banks.
 urn:newsml:reuters.com:*:nL1N2T90B3 
    Cinda, one of the country's four biggest state asset
managers, said the withdrawal would not have any material impact
on the company.
    Chongqing Ant Consumer Finance said in a statement that it
"fully respects the business decision made by its investor,"
adding, "under the guidance of regulators, the company will
actively hold discussions with investors... and ensure the
rectification work on the consumer finance business is
effectively carried out."
  
($1 = 6.3571 Chinese yuan)

 (Reporting by Harish Sridharan in Bengaluru and Yingzhi Yang in
Beijing; Editing by Aditya Soni)
 ((Harish.Sridharan@thomsonreuters.com;))