Ant Financial to raise US$3 billion in debt to fund expansion

Company to use proceeds for part financing of MoneyGram acquisition

PUBLISHED : Thursday, 09 February, 2017, 7:16pm
UPDATED : Friday, 10 February, 2017, 9:21am

Ant Financial, the financial affiliate of e-commerce giant Alibaba Group, is planning to raise about US$3 billion through debt financing to fund its ambitious global expansion plans.

The company, which operates China’s largest third-party payments platform Alipay, is reportedly in discussions with bankers to raise the amount via bonds or bank loans.

The company is currently valued at US$60 billion following its US$4.5 billion fundraising round last year, which was touted as the largest private technology funding round in history.

Ant Financial is raising the funds in part to finance its US$880 million acquisition of US-based money transfer provider MoneyGram International and other acquisitions, Bloomberg reported, citing anonymous sources.

Alibaba affiliate Ant Financial to acquire MoneyGram in US$880 million deal

“It is the market practice for a globalised company like Ant Financial to raise debt in US dollars,” said Ant Financial spokesperson Miranda Shek. She, however, declined to reveal the exact amount of financing the company is targeting to raise. The financing comes ahead of Ant Financial’s plans for an initial public offering, although no concrete timeline has been confirmed.

US-based technology website The Information had first reported about Ant Financial’s fund-raising plans, citing people familiar with the matter.

Ant Financial has been expanding aggressively into overseas markets, in particular India and Southeast Asia.

Everyone should have a bank account
Jack Ma, founder, Alibaba

Jack Ma Yun, Alibaba’s founder, said last year that Ant Financial is focused on servicing the under banked and unbanked populations in developing countries. Alibaba owns the South China Morning Post.

“Everyone should have a bank account,” Ma said at a conference last year. “It is not a business model competition ... Getting a business model is simple if you really solve a big problem and create value.”

Ant Financial forms strategic partnership with Thai fintech Ascend Money

Last November, Ant Financial formed a strategic partnership with Thailand-based e-payments provider Ascend Money to provide services to the Thai market. The company also invested US$680 million last September in Indian e-wallet company Paytm.

The company has also partnered with over 80,000 merchants in countries and regions such as the US, Britain, Germany, Hong Kong, Taiwan, Macau and several countries in Southeast Asia, allowing Alipay users to pay for their purchases with the Alipay app in-store.

Ant Financial chief executive Eric Jing said last month that the company is aiming to reach two billion users in 10 years. It currently has over 450 million users of its mobile wallet service in China.