Leading China-based mobile payments company Ant Financial is set to sell $5 billion in fresh equity – a move tipped as a forerunner to an IPO – Reuters reported.
The news website’s sources said the sale would give the company a valuation of between $80 billion and $100 billion. It added this, combined with other recent developments, follow the typical trend of large Chinese companies preparing for a public share offering.
Last week, Alibaba announced it was set to change its relationship with its mobile payments affiliate.
E-Commerce giant Alibaba giant founded Ant Financial forerunner Alipay in 2004, before spinning the company off into a separate entity. It was rebranded Ant Financial in 2014. Currently Alibaba takes a 37.5 per cent of Ant Financial’s pre-tax profit in the form of royalty payments but holds no direct stake.
Alongside its Q4 results in February, Alibaba announced it was trading in its current arrangement in favour of taking a third equity share in the Alipay owner. Part of the deal included transferring some IP deemed central to Ant Financial’s operation still owned by its former parent.
The simplification of its arrangement is widely speculated to be smoothing the way towards an IPO.
Ant Financial runs China’s leading mobile payments platform Alipay and holds interests in some of the largest m-commerce providers in Asia. These include a significant stake in the parent of India mobile wallet company Paytm, Kakao Pay in South Korea and Ascend Money in Thailand. It also signed a number of partnership agreements to widen its scope outside of Asia.
However, it was forced to abandon attempts to expand into the US through the acquisition of remittance company MoneyGram after it “became clear” the merger wouldn’t get through US foreign investment authorities.