Ant Group’s consumer unit gets $1.5B green light
Billionaire Jack Ma’s Ant Group has been given the go-ahead on its plan to raise 10.5 billion yuan (roughly $1.5 billion) for its consumer unit, Bloomberg reports.
Why it matters: The move signals the Chinese government is easing on its tech crackdown.
- It brings Ant Group a step closer to reviving its initial public offering after the government torpedoed the company’s IPO bid in 2020
Flashback: China’s central bank ordered a major overhaul of the Chinese financial technology firm, calling for Ant to follow regulations, revamp lending and other consumer finance operations and “return to its roots” as an online payment service provider.
Details: China’s regulatory authority also allowed the company to lift its capital to 18.5 billion yuan, per Bloomberg.
- The company will only control half of its shares after the deal, while a city of Hangzhou-owned entity will hold 10% and become the unit’s second-biggest shareholder.
- New investors include Sunny Optical Technology Group and Jiangsu Yuyue Medical Equipment & Supply.
State of play: Chinese regulators have tried to rein in its Big Tech industry over the past few years, as it grapples with a growing shadow banking industry and the prospect of its homegrown tech giants’ largesse turning them into monopolies.
- This has resulted in a chill in the IPO market there and investors to steer clear or more cautiously.
Yes, but: The government has shown some signs of easing as of late, as it ended a cybersecurity probe against ride-hailing company Didi last year and greenlit several blockbuster game releases from Tencent Holdings last week.