Alibaba’s affiliate - fintech giant Ant Group - has received approval to increase the amount of registered capital for the company’s consumer unit.

Citing CNBC, RBC writes that Alibaba’s shares traded 8,74% higher on January 4 with the cost of one share making $12.33.

The unit’s capital will be increased from $1.16 billion to $2.69 billion. Ant will still hold a 50% stake in the consumer finance company, according to the announcement. New investors in the other half of the company include an entity backed by the Hangzhou government and Sunny Optical Technology. At the same time, the unit owned by the Hangzhou government, will hold 10%, becoming the second biggest shareholder of the Ant Group’s unit.

The unit was created in 2021 as part of the restructuring of the fintech company following the unexpected suspension of Ant Group’s IPO by Chinese regulators at the end of 2020. The fintech company, which was valued at $313 billion, was going to hold the largest IPO in the world at that time. It planned to place $34 billion in shares on the Shanghai and Hong Kong stock exchanges. But a few days before the IPO, regulators suspended it. One of the reasons could be the disagreement between Jack Ma and the Chinese authorities following Ma’s criticism of the country’s financial system shortly before the listing.

After the IPO suspension, Alibaba’s shares dropped by 8%. It is still unclear whether it is planned to make Ant Group public or not.

The approval to increase the capital of the unit indicates significant progress in the restructuring of the fintech company, Bloomberg notes. At the same time, it also indicates an easing of the authorities’ position in relation to the technology sector, against which strict regulatory measures were previously introduced.

It was reported earlier that in April 2021, Ant Group agreed to restructuring to become a financial holding company and be supervised by the Central Bank of China.

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