China Cinda Asset Management, one of China’s major state-owned asset managers, has announced plans to withdraw from an agreement to purchase a 20% stake in Ant Group’s consumer finance unit, worth around RMB 6 billion ($943.83 million), reports Reuters. The purchase would have given Cinda a 24% stake in Chongqing Ant Consumer Finance, making the asset manager its second-largest investor. Cinda already owns a 4% 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.