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Ant Group plans to carve out noncore parts of its business in a restructuring, Bloomberg reports.

Why it matters: Ant needs to streamline operations and get on the right side of regulators as part of its march to a public listing.

Driving the news: Ant Group reportedly plans to divest its blockchain, database management services and international business.

After that divestment, the remaining entity will apply for a financial holding license in China, at which point it would be regulated more like a bank.

Once that license is secured, Ant would prepare an initial public offering in Hong Kong.

Context: The restructuring is just one part of the process necessary for Ant Group to revive its IPO plans.

Earlier this month, Ant Group was fined close to $1 billion by Chinese regulators, giving hope that the government’s crackdown on the company was coming to a close.

It subsequently announced a share repurchase plan through which it would buy back up to 7.6% of its equity interest.

Between the lines: The share buyback values the firm at around $79 billion, a huge step down from the $300 billion it had been valued at in its abandoned IPO filing.

As a result, major Ant Group shareholders like Alibaba, which owns 33% of the company, plan to stay on the sidelines.

Yes, but: Some Chinese state-owned firms that participated in early funding rounds could cash out, Bloomberg reports.

Early investors include China’s National Council for Social Security Fund and China Development Bank Capital, which invested in a 2015 round valuing the company at around $45 billion.

Ant Group plans restructuring in march to Hong Kong IPO

The restructuring represents a second step toward an IPO.

Illustrations of ants marching in a downward trend line across a grid

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Ant Group plans to carve out noncore parts of its business in a restructuring, Bloomberg <a class="gtmContentClick" data-vars-link-text="reports" data-vars-click-url="https://www.bloomberg.com/news/articles/2023-07-26/jack-ma-backed-ant-plans-restructuring-paving-way-for-hk-ipo" data-vars-content-id="c33179af-6aa4-4103-8cbc-33d070652e92" data-vars-headline="Ant Group plans restructuring in march to Hong Kong IPO" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.bloomberg.com/news/articles/2023-07-26/jack-ma-backed-ant-plans-restructuring-paving-way-for-hk-ipo" target="_blank">reports</a>.Why it matters: Ant needs to streamline operations and get on the right side of regulators as part of its march to a public listing.

Ant Group plans restructuring in march to Hong Kong IPO

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