Ant Group Co. plans to make itself a financial holding company overseen by China’s central bank and responds to pressure to fall fully in line with economic rules, according to people familiar with the matter.
Chinese regulators recently told Ant, controlled by billionaire Jack Ma, to become a financial holding company in its entirety and subject to the stricter capital requirement, the people said. In response, Ant has submitted to the authorities an overview of a restructuring plan, they said.
The plan represents a significant turnaround for a digital payment juggernaut, which in recent years has sought to shed its image as a financial services provider and shape itself as an Internet technology company that helped it manage high valuations. Before its huge IPO was canceled in November, Ant had been on the verge of being listed at a valuation north of $ 300 billion, well above the market values of the world̵
Appointing Ant as a whole as a financial holding company was not previously imagined by the company’s managers and stakeholders. In its listing prospectus last year, Ant said it was the intention of one of its subsidiaries to become a financial holding company and house its licensed financial companies such as wealth management and consumer lending. Doing so at group level will ant be exposed to a thicket of rules similar to those that govern banks, affecting its growth and profitability.
The restructuring plan, which is still under consideration, could be finalized before China takes a week-long lunar New Year holiday in mid-February, people familiar with the matter said.