Ant Group’s restructuring hits a snag as Cinda, Yuyue unexpectedly pull out of Chongqing Ant’s capital raising plan

Cinda said its board decided “not to participate” in the plan to pay 6 billion yuan for an additional 20 per cent stake in Chongqing Ant, first announced on December 24

Cinda’s withdrawal created a ripple effect, prompting Jiangsu Yuyue Medical Equipment & Supply to defer its 1.1 billion yuan plan to raise its stake, according to a statement

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China Cinda Asset Management’s booth during an exhibition in Beijing on 3 November 2011. Photo Handout

Published: 11:35pm, 13 Jan 2022Updated: 1:51pm, 14 Jan 2022

Cinda Asset Management has unexpectedly withdrawn from the recapitalisation of Chongqing Ant Consumer Finance barely three weeks after announcing it, adding a surprising twist to the restructuring of China’s largest fintech company.

Cinda said its board decided “not to participate” in the plan to pay 6 billion yuan (US$943 million) for an additional 20 per cent stake in Chongqing Ant, according to a filing to the Hong Kong stock exchange signed by the bad-loans manager’s chairman Zhang Zi’ai.

“After further prudent commercial consideration and negotiation with the target company, [Cinda] proposed not to participate in the share subscription,” the company said, without naming Chongqing Ant.

The Beijing-based company, set up in 1999 to manage the bad loans of China Construction Bank, did not say why it withdrew from the December 24 plan. Cinda owned 15 per cent of Chongqing Ant through its wholly owned unit Nanyang Commercial Bank as of June 2021, according to regulatory filings.

In this October 2020, photo, the the Ant Group’s mascot is displayed at the company’s office in Hong Kong. Photo: AP

Chongqing Ant is a consumer finance company 50 per cent owned by Ant Group, the world’s largest fintech company and an affiliate of this newspaper’s owner Alibaba Group Holding. It houses the two consumer credit services Huabei and Jiebei, which provide small loans to online shoppers and merchants.

Ant Group had been undergoing a restructuring and review of its myriad businesses ever since its US$39.7 billion initial public offering (IPO) was foiled in November 2020 days before shares were due to commence trading in Shanghai and Hong Kong.

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