Ant Group, a financial holding controlled by Alibaba has received the go-ahead from the Chinese authorities for a capital increase of approximately 1.4 billion euros.
An important step as the Chinese tech sector has been under pressure since 2020. The Communist government led by Xi Jinping has hit Internet companies, fined them for competition issues and use of personal data.
Ant Group was the first to face the intervention of the authorities with regulators having canceled its IPO in Hong Kong in late 2020, which was estimated at $34 billion.
Two years later, the banking and insurance regulator, the China Banking and Insurance Regulatory Commission (CBIRC) gave its consent to Ant for a capital increase.
The company founded by Jack Ma will be able to increase up to 18.5 billion yuan against the current 9.2 billion yuan, according to the press release.
This is about 1.4 billion euros. Once the transaction has been completed, Ant Group will be able to hold a maximum of 50% of the shares.
Alibaba shares closed nearly 9% up on the Hong Kong Stock Exchange on Wednesday.