China’s Cinda scraps $944 mln investment into Ant’s consumer finance unit

A man walks past an Ant Group logo at the World Artificial Intelligence Conference (WAIC) in Shanghai, China July 8, 2021. REUTERS/Yilei Sun

Jan 14 (Reuters) – China Cinda Asset Management (1359.HK) said on Thursday it plans to scrap an agreement to buy a 20% stake in the consumer finance arm of Ant Group, worth 6 billion yuan ($943.83 million).

The investment would have increased Cinda’s interest in Chongqing Ant Consumer Finance Co Ltd to 24%, making the asset manager its second-biggest investor.

Cinda effectively owns a 15% stake in the Ant-affiliated firm through Nanyang Commercial Bank Ltd, a Cinda subsidiary. The stake would have been diluted to 4% after the investment.

“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.

Ant Group’s consumer finance arm 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. read more

Cinda, one of the country’s four biggest state asset managers, said the withdrawal would not have any material impact on the company.

Chongqing Ant Consumer Finance said in a statement that it “fully respects the business decision made by…