HANGZHOU, CHINA – OCTOBER 27: Ant Group’s logo is seen at the company’s headquarters on October 27, 2020 in Hangzhou, Zhejiang province of China.
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Ant Group on Saturday announced a share buyback plan valuing the fintech giant at 567.1 billion yuan ($78.54 billion), as management looks to replenish an employee incentive fund. and let some investors back out after the regulator fined the company.
It marked a sharp drop in the value of more than $300 billion attributed to the company in mid-2020, before its planned IPO later that year was scrapped.
Ant said it has proposed to all its shareholders to buy back up to 7.6% equity interest at a price that represents the group’s valuation of about 567.1 billion yuan.
“The repurchased shares will be channeled into Ant Group’s employee incentive plan to attract talent. The buyback proposal will also provide a liquidity option for the company’s investors,” it said.
Ant’s major shareholders, Hangzhou Junhan Equity Investment Partnership and Hangzhou Junao Equity Investment Partnership, have voluntarily decided not to participate in the acquisition, the company added.
China’s central bank said on Friday that financial regulators would fine Ant and its subsidiaries a total of 7.12 billion yuan in a move that would mark the end of a trade war. A years-long regulatory overhaul for fintech companies and a crucial step toward ending a crackdown on the country’s internet sector.
Founded by billionaire Jack Ma, Ant operates China’s popular mobile payment app Alipay as well as insurance and consumer loan distribution businesses, among others.
In April 2021, Ant embarked on extensive corporate restructuring, including transforming itself into a financial holding company subject to the same rules and capital requirements as banks.
Ant’s punishment paved the way for the financial technology company to gain a financial holding company license, focusing on driving growth and eventually reinstating its plans to list on the stock market.
For the broader tech sector, Ant’s punishment marks an important step toward ending China’s fierce crackdown on private businesses, which began with the cancellation of Ant’s IPO last year. end of 2020 and then wipe billions of dollars off the market value of some companies.
On Friday, Chinese authorities also announced penalties for two Chinese banks, an insurance company, and Tencent Holdings’ Tenpay online payment platform.
The People’s Bank of China (PBOC) said that most of the outstanding problems facing the financial business of platform companies have been fixed and that regulators will now shift from focusing on financial services. company-specific to industry-wide regulations.
