China Huarong is planning to sell its 4.99% stake in Chongqing Ant Consumer Finance Co as part of a restructuring plan that includes exiting its non-core businesses. The news comes a day after the bad-debt manager revealed through a filing that it plans a public transfer of its 70% stake in Huarong Consumer Finance aiming to shore up its finances. Ant Group, the majority stakeholder of Chongqing Ant Consumer Finance Co., is expected to buy Huarong’s share for CNY 399mn ($62mn) although no formal discussions have taken place so far. An extraordinary general meeting has been scheduled on August 17 for the shareholders to vote on the proposal.
Chongqing Ant Consumer Finance Co. had won approval to begin operating in Chongqing city in June this year, nearly two months after it was ordered to restructure by the Chinese regulators. Ant owns a 50% stake in the consumer finance co., HK based Nanyang Commercial Bank holds 15% and Taiwan’s Cathay United Bank holds 10%. Rest of its share is held by battery maker CATL, China TransInfo Technology and Huarong AMC. Trading of China Huarong’s shares have been suspended since March after it failed to report its 2020 results subject to audit approvals. The asset manager is expected to announce the results before the end of this month as per sources.