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EXCLUSIVE Beijing gives first nod to revive Ant IPO after decomposition of cooling sources

  • Ant aims to submit a preliminary prospectus as soon as July sources
  • Ant needs CSRC’s guidance on the time for submitting the prospectus
  • Ant says that there is no plan to relaunch its IPO statement
  • Warburg Pincus valued Ant at $ 180 billion at the end of March

HONG KONG, June 9 (Reuters) – China’s central leadership has given billionaire Jack Ma’s Ant Group a tentative green light to revive its listed offering (IPO), said two sources with knowledge of the matter, in the clearest sign yet Beijing is in in the process of easing its impact on the technology sector.

Ant, an affiliated Chinese e-commerce behemoth Alibaba Group Holding Ltd (9988.HK), aims to submit a preliminary prospectus for the share issue in Shanghai and Hong Kong as early as next month, the sources said, refusing to be named due to. to the sensitivity of the case.

The Fintech giant will have to wait for guidance from the China Securities Regulatory Commission (CSRC) on the specific time for submitting the prospectus, said one of the sources.

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In a public statement, Ant said that there was no plan to relaunch the listing, without elaborating. It did not respond to Reuters’ request for comment on whether it had received the green light from Beijing.

The company’s IPO was hastily shelved by order of Beijing in November 2020. At the time, it was valued at around $ 315 billion and planned to raise $ 37 billion, which would be a world record.

“Under the guidance of regulators, we are focused on constantly continuing our improvement work and have no plans to launch a stock exchange listing,” Ant said on his WeChat account late Thursday.

Neither the CSRC nor the Chinese State Council Information Office, which handles media inquiries to key executives, responded to Reuters’ request for comment.

Ant wants to keep the IPO plans low profile pending a formal announcement, after attracting regulatory reflection in its first attempt back in 2020 with the waves the offer created as the world’s largest stocks ever, a separate source with direct knowledge of the matter said.

Chinese authorities pulled the plug on the IPO and cracked down on Ma’s business empire after he gave a speech in Shanghai in October 2020 in which he accused financial watchdogs of stifling innovation.

The derailment of the stock exchange marked the start of a regulatory intervention to curb China’s huge homemade technology sector, which spread to other industries, including real estate and private education, dried up billions of market values ​​and triggered layoffs in some companies.

With its economy declining in a politically sensitive year as Xi Jinping is expected to secure a unique third term as party leader, Beijing wants to loosen its grip on private companies including technology giants to help it reach a 5.5% growth target, which economists have said that it will be difficult to reach given COVID-19 barriers. read more

“They are rolling back on the downturn to counteract the shutdown they have had. All the data from China lately has been terrible due to shutdowns, and the last thing they want to do is amplify this problem. Over the next three to six The months are likely to see China’s breakdown wind down, “said David Madden, a market analyst at Equiti Capital London.

A revival of the listing may also mark a kind of rehabilitation for Ma, who has kept a low public profile since Beijing’s entry.


Chinese Deputy Prime Minister Liu He told technical leaders last month that the government supported the development of the sector and will support companies pursuing IPOs at home and abroad. read more

As another sign of Beijing’s softer stance, China’s ride-hailer Didi Global, who has been under a cyber security investigation since last year, is in advanced talks to buy a third of a state-subsidized electric car maker, Reuters reported on Wednesday.

The news of the talks comes after the Wall Street Journal on Monday reported that Chinese regulators are set to end their investigations of Didi, which may give investors more hope for recovery. read more

Bloomberg reported earlier Thursday that Chinese financial regulators had begun talks at an early stage about a potential revival of Ant’s stock market debut, without mentioning a timeline. read more

The chief securities regulator had established a team to reconsider plans for the sale of shares, Bloomberg reported.

The regulator later said in a statement that it had not carried out any assessment or research work regarding an Ant IPO.

The US listed shares in Alibaba, which owns almost a third of Ant, fell 7% after a previous rise of as much as 7% in pre-market trading on the Bloomberg report.

The US private equity firm Warburg Pincus, a major investor in Ant’s private fundraising in 2018, lowered Ant’s valuation to around $ 180 billion at the end of March from $ 221 billion a year earlier, a separate source said.

Regulators have asked Ant to restructure as a financial rather than a technology firm, and sources and analysts have said that the financial sector usually has lower valuations.

Warburg Pincus declined to comment Thursday.

“The size of Ant and the listing will have to be smaller than planned in 2020 because market conditions have changed and are not comparable to now,” said Dickie Wong, CEO of Kingston Securities in Hong Kong.

US-listed shares in Chinese technology and e-commerce companies, including Didi and Alibaba, have received hints this week that Beijing’s one-and-a-half-year downturn could be eased.

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Reporting by Julie Zhu; Additional reporting by Medha Singh, Abinaya Vijayaraghavan, Scott Murdoch, Kane Wu and Vidya Ranganathan; Edited by Sumeet Chatterjee, Carmel Crimmins, Elaine Hardcastle and David Evans

Our standards: Thomson Reuters Trust Principles.

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