Original title: Ant Consumer Finance’s capital increase plan has changed into China Cinda and other 3 companies to give up their holdings
Our reporter Li Bing
The capital increase plan of Ant Consumer Finance has changed.
On the evening of January 13, China Cinda, one of the subscribers for the capital increase of Ant Consumer Finance, issued an announcement stating that after negotiating with the target company (i.e. Chongqing Ant Consumer Finance Co., Ltd., hereinafter referred to as “Ant Consumer Finance”), it plans not to participate in 2021 On December 24, 2018, the Company entered into an equity subscription agreement. Abandon the capital increase of Ant Consumer Gold. Perhaps affected by this news, on January 14, China Cinda fell 11.18% at the opening, and as of the close, the company’s stock price fell by 9.87%.
Subsequently, on January 14, the other two intentional subscribers of this round of capital increase, Fang Yuyue Medical and Sunny Optical Technology, also issued an announcement to suspend the capital increase and transaction progress of the participating companies.
On January 14, in response to this matter, Ant Consumer Finance told a reporter from Securities Daily: “Respect investors’ business decisions. Under the guidance of regulatory authorities, Ant Consumer Finance will actively negotiate with all investors, and continue to follow the guidelines. The market-oriented principle will determine a new capital increase plan as soon as possible to ensure that the rectification of the consumer credit business is put in place.”
It is understood that China Cinda, as one of the capital increase subscribers, entered into an equity subscription agreement with Ant Consumer Finance, other capital increase subscribers and other existing shareholders. According to the equity subscription agreement, Ant Financial will issue an additional registered capital of RMB 22 billion to all capital increase subscribers. Among them, China Cinda will invest 6 billion yuan to subscribe for 20.000% equity interests in Ant Consumer Finance in cash.
According to China Cinda’s announcement, non-participation in the equity subscription will not have a material adverse effect on its operations and financial condition.
Statistics show that China Cinda Asset Management Co., Ltd., established in April 1999, is the first financial asset management company approved by the State Council. On December 12, 2013, China Cinda was listed on the main board of the Hong Kong Stock Exchange, becoming the first Chinese financial asset management company to enter the international capital market. Based on its main business of non-performing asset management, it focuses on investment in troubled assets and rescue of troubled institutions, and strives to resolve the risk of non-performing assets of financial institutions and real enterprises.
The reporter noted that, according to public information, China Cinda held a 15% stake in Ant Consumer Finance through its wholly-owned subsidiary Nanyang Commercial Bank last year. If it further participates in the capital increase subscription, its investment in the single target company of Ant Consumer Gold will be relatively concentrated.
In addition, Yuyue Medical issued a capital increase suspension announcement saying that the company received a notice from Ant Consumer Finance on January 13, 2022, and one of the partners, China Cinda, decided not to participate in this capital increase, and the capital increase plan still needs to be further adjusted. Therefore, Yuyue Medical, Ant Consumer Finance and other partners have reached an agreement to suspend matters related to this capital increase. After Ant Consumer Finance updates its capital increase plan, Yuyue Medical will re-evaluate relevant investment matters.
In addition, Sunny Optical Technology also issued an announcement on the same day that Ant Financial had issued a notice on January 13, 2022, informing the company that it had decided to suspend this capital increase due to the withdrawal of several subscribers from the equity subscription agreement. Sunny Optical Technology stated that the company will issue a separate announcement after Ant Financial has proposed a revised capital increase plan and the company has further evaluated the plan.
Zeng Gang, deputy director of the National Finance and Development Laboratory, told the Securities Daily that China Cinda’s decision not to subscribe and increase its holdings of Ant Consumer Gold is likely due to the requirements of focusing on the main business and investment concentration. “In recent years, the regulatory authorities have continued to guide the AMC industry (financial asset management companies and local AMCs) to return to their origins, focus on the main business, and continuously improve core capabilities such as non-performing asset disposal, so as to better play their role in preventing and resolving financial risks. “
The “Securities Daily” reporter noticed that, judging from the series of actions of Ant Group in the past two years, its financial sector is entering a deep-water area of rectification. Since the IPO was suspended in 2020, the consumer finance credit products represented by “Huabei” and “Beibei” under Ant Group have been incorporated into the Ant Consumer Finance sector; in June 2021, Ant Consumer Finance was approved to open, and in November of the same year, “Huabei” and “Beibei” have been integrated and become the exclusive consumer finance credit product of Ant Consumer Finance.
Wang Pengbo, a senior analyst at Broadcom, told Securities Daily that China Cinda’s capital increase should not affect the overall plan of Ant’s capital increase, and the follow-up new capital increase plan is worth looking forward to.