- The China Banking and Insurance Regulatory Commission approved ANT Groups request to increase the registered capital for the company’s consumer unit from 8 billion yuan to 18.5 billion yuan on Friday.
- Chinese media had previously reported the banking regulator’s approval, so the terms of which had previously been made public.
- Ant has been working with Chinese regulators to restructure its business since the abrupt cancellation of its massive IPO in late 2020.
BEIJING. Ant Group’s customer finance division has been cleared to more than double its share capital, indicating progress in addressing regulatory challenges.
Since the abrupt suspension of its massive IPO in late 2020. ANT group has been working with Chinese regulators to restructure its business. Alibaba owns 33% of ANT, which operates one of China’s two leading mobile pay apps.
Hong Kong-traded shares of Alibaba traded 8% higher on Wednesday. So, Shares listed in New York closed 4.4% higher overnight.
ANT Group launch its consumer finance company in 2021 as part of a restructuring.
On Friday, the China Banking and Insurance Regulatory Commission said it had approved Ant’s request to increase the registered capital of its consumer division from 8 billion yuan to 18.5 billion yuan.
According to the announcement, Ant will continue to own a 50% stake in the consumer finance company. Among the new investors in the other half of the company are the Hangzhou government and a unit backed by Sunny Optical Technology.
“This is a positive start to the steps that Ant Financial needs to take in its restructuring process under the supervision of the CBIRC and PBOC,” said Winston Ma, associate professor of law at New York University.
It remains unclear what the timing of the revival of IPO plans if any, is. Ant has not yet received a financial holding company license from the People’s Bank of China. The company did not immediately respond to CNBC’s request for comment.
The consumer division houses the lending companies Ant Huabei and Jiebei. According to the prospectus, the so-called credit technology generated 28.59 billion yuan, or 39.4%, of Ant’s revenue in the first six months of 2020.
China’s banking regulator said the company has six months to make changes before the approval for the capital increase becomes invalid.
Chinese media has previously reported on the approval. The terms of which had previously been made public.
News Source: CNBC