China Cinda Asset Management said on Thursday it plans to scrap an agreement to buy a 20per cent stake in the consumer finance arm of Ant Group, worth 6 billion yuan (US$943.83 million).
The investment would have increased Cinda’s interest in Chongqing Ant Consumer Finance Co Ltd to 24per cent, making the asset manager its second-biggest investor. Cinda already owns a 4per cent stake in the Ant unit through a subsidiary.
“After further prudent commercial consideration and negotiation with (Chongqing Ant Consumer Finance), the company proposed not to participate in the share subscription,” Cinda said in a filing to the stock exchange.
Chongqing Ant Consumer Finance is under regulatory pressure to fold Ant’s two lucrative micro-loan businesses Jiebei and Huabei into it, which would make it subject to rules and capital requirements similar to those for banks.
Cinda, one of the country’s four biggest state asset managers, said the withdrawal would not have any material impact on the company.
(US$1 = 6.3571 Chinese yuan)
(Reporting by Harish Sridharan in Bengaluru; Editing by Aditya Soni)