Ant Group plans to hive off credit data in revamp; sees IPO in 2 years

Ant Group plans to spin off its consumer-credit data operations, people with knowledge of the matter said, a concession to aggressive regulators that should help the Chinese fintech giant get its massive public share sale back on track.
 
Hiving off the treasure trove of data on more than 1 billion people is a key part of Ant’s business overhaul in response to a regulatory crackdown that resulted in the abrupt suspension of its $37 billion initial public offering (IPO), which would have been the world’s biggest, the people told Reuters.
 
The data spinoff, along with Ant’s conversion to a more strictly regulated financial holding company, will mean the affiliate of e-commerce behemoth Alibaba Group Holding could proceed with the IPO within two years, two other people said.

 

Ant’s restructuring plan, which Reuters reported on Wednesday, could ease billionaire founder Jack Ma’s regulatory woes. The mammoth credit information and rating operations, as a separate unit, will also be subjected to regulatory supervision, said two of the sources.
 
“Ant’s financial holding firm will be granted the license from the PBOC and will be allowed to go public after the overhaul,” one of the people said, referring to the People’s Bank of China, the central bank.
 
The plans are not final and are subject to change, cautioned the people, who asked not to be named as they were not authorised to speak to the media. Ant declined to comment. The PBOC, which is lead­ing regulatory efforts on Ant’s restru­cturing, did not immediately respond to Reuters request for comment. PBOC Governor Yi Gang, asked last week about a revival of Ant’s IPO, replied, “I’d say that you just follow the standard of legal instruction, you will have the result.”

 
The regulatory crackdown on Ma’s business empire in China, where he commands a cult-like reverence, followed an Oct. 24 speech in which he blasted the country’s regulatory system. Ant pulled its IPO just days before the Hong Kong and Shanghai dual debut was scheduled.
 
Authorities launched an antitrust probe into the tech sector, with Alibaba taking much of the heat, and pushed Ant to revamp its business structure to bring it under tighter regulatory supervision. The garrulous Ma disappeared from public view for three months.
 
The planned tighter regulation of Ant will give it a market value in line with financial institutions, far lower than its initially envisioned valuation as a fintech company.

 
Alibaba’s share price is down 15 per cent from the IPO halt, although it has recouped much of its early plunge as Ma has re-emerged and the outlook for the Ant listing has improved. Ant, which began as Alibaba’s payments arm, sits on an enormous cache of consumer data. That is the backbone of China’s internet platforms, with companies offering financial products from consumer loans to investment products via smartphones.