Ant Financial Services Group has invested a sum of $30 million in the Chinese bank along with other 4 cornerstone investors to help the Zhejiang based bank.
In Hong Kong, the first huge IPO in 2016 is being launched with Alibaba’s financial partner Ant Financial cornerstone investment amongst those making the way. An IPO was launched by China Zheshang Bank Company with an amount of $984 million in support from 5 cornerstone investors, including $30 million invested by the Chinese e-commerce company’s financial affiliate.
It is Ant Financial’s first cornerstone investment, which runs the Chinese topmost online service provider in terms of users, Alipay. The Zhejiang based bank looks to receive $1.75 billion, turning its IPO the first one in the region to cross $1 billion figure in 2016. An unstable stock market slightly up from its decline in February and January, but down 6.75% in 2016, has made investors careful of pledging capital to fresh offerings
Investors pledged funds to public offering at the offering price but are bound to hold the stock for a specific period after the stock begins trading. Enlisting funds is a way to provide confidence to the rest of the investors. In case of the bank, the huge commitments raised the bar of IPO from the previously planned sum of $1 billion.
Less than 12 IPOs this year have been hosted in Hong Kong, which have raised a cumulative $853 million, compared to a sum of $1.3 billion and 19 IPOs at this point last year, revealed by Dealogic data. This year’s to-date is smallest since 2011.
The most valued internet finance company of China, Ant Financial is raising $3.1 billion (20 billion Yuan) in this present financing round from a group of existing and new investors, as recently reported by WSJ. The rounds, which pushes its value at a sum of over $50 billion, will probably end up by April 15 2016, revealed by people aware of the situation.
The rest of the cornerstone investors in the IPO of the Chinese bank include state-owned Zhejiang Provincial Seaport Investment & Operation Group, brokerage service provider ‘Shenwan Hongyuan’ and Chinese investment company ‘Shaoxing Lingyan Equity Investment Fund Partnerships’, the term sheet revealed.
Chinese organizations are continuously seeking cornerstone investments from friendly Chinese investors, which have raised the question that whether Hong Kong has lost the conventional role to connect global investors along with their tighter scrutiny with Chinese companies.
On March 15, 2016, Bank of Tianjin is also launching an HK IPO as it seeks to raise a sum of $1.23b, as revealed by IPO prospectus; Bank of Tianjin secures a total sum of $560m from 7 Chinese cornerstone investors, according to the prospectus.
Ant Financial previously collaborated with the online trading company to purchase a share in AGTech Holdings for $308 million. AGTech is a lottery company listed in Hong Kong.
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