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February 10, 2017

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Ant seeks US$2-3b in debt from banks

CHINA’S most valuable online finance company, Ant Financial, is in early stage talks with banks to raise US$2-3 billion in debt to fund acquisitions and foreign investments, a person with direct knowledge of the matter said.

Banks have made “soft pitches” to help Ant raise funds, most likely through loans, to be used by the company for acquisitions such as that of MoneyGram International Inc as well as for boosting existing investments, the person said.

Ant, an affiliate of online shopping giant Alibaba Group, dominates China’s online payment market, but has been ramping up investment overseas amid fierce competition at home with peers like Tencent Holdings Ltd’s popular WeChat Pay.

“It is the market practice for a globalized company like Ant Financial to raise debt in US dollars,” a representative of Ant Financial said, but gave no further details.

Ant, valued at US$60 billion after a US$4.5 billion funding round last April, is set for an initial public offering, though the firm has not specified a time frame or listing venue.

With 450 million users of its Alipay payment service, Ant is making a concerted push to expand its presence overseas.

Last month, the firm said it would acquire US money-transfer company MoneyGram for about US$880 million. It has also invested in Indian mobile payment and e-commerce website Paytm and Thai financial technology firm Ascend Money.

Ant’s move to raise funds via debt, instead of selling equity as most Chinese tech firms have done in the past, is due to favorable interest rates for bank loans, the source said.


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