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EXCLUSIVE Investor Warburg cuts Ant valuation by 15% to below $200 bln – source

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HONG KONG, Nov 24 (Reuters) – Warburg Pincus, a significant world investor in Ant Group, has reduce its valuation of the Chinese fintech firm by 15% to below $200 billion due to dangers from a restructuring on the Hangzhou-based agency, a source with direct information of the matter mentioned.

There are additionally no indicators that Ant’s botched mega IPO shall be revived anytime quickly, sources conversant in the matter mentioned.

U.S. non-public fairness agency Warburg (WP.UL), which was an enormous investor in Ant’s 2018 non-public fundraising, lowered the corporate’s valuation to $191 billion at end-September from the $224 billion at end-June, the primary source advised Reuters.

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Warburg’s reducing of Ant’s value comes after another world traders have already slashed their valuations and reveals skepticism about its prospects is rising because the payments-to-loans behemoth remodels itself underneath regulatory stress.

The valuation markdowns will weigh on the returns of the worldwide traders who have been betting on Ant’s as soon as turbo-charged progress.

Warburg’s newest valuation of Ant, an affiliate of Alibaba Group , is way in need of $315 billion that was touted one yr in the past at its deliberate IPO, which might have been the world’s largest if it weren’t derailed on the final minute.

The non-public fairness heavyweight modified its valuation methodology for the corporate, citing “regulatory developments and the impact of ongoing restructuring”, mentioned the source, with out elaborating.

Ant and Warburg declined to remark. The sources declined to be recognized as they weren’t authorised to converse to media.

Ant’s $37 billion IPO was referred to as off by regulators two days earlier than its scheduled twin-itemizing in Hong Kong and Shanghai, leaving traders guessing about their return prospects.

Since the IPO’s cancellation, Ant, managed by Alibaba’s billionaire founder Jack Ma, has launched into a restructuring plan that might see itself grow to be a monetary holding firm. It can also be shrinking its as soon as-booming shopper credit score enterprise, opening its information trove to different corporations, and faces new laws in its funds and insurance coverage companies. learn extra

IPO PROSPECTS

In the primary half of the yr, Ant generated income of about $16.9 billion, up 52% yr-on-yr and $4.9 billion in adjusted web revenue, up 29% yr-on-yr, in accordance to a contemporary monetary doc ready by an investor and seen by Reuters.

According to Alibaba’s September quarterly monetary earnings report, Ant’s revenue was $5.2 billion within the first half, up 43% yr-on-yr. Alibaba mentioned the rise was primarily due to web positive factors from truthful worth modifications in Ant’s investments.

Similar to Warburg, a string of different Ant traders have reduce their valuations of the corporate for the reason that begin of the yr.

Fidelity, an Ant investor that joined in the identical spherical as Warburg, valued it at $68 billion at end-July, Reuters calculations primarily based on its public disclosures confirmed. In January, it valued Ant at $233 billion.

In June, Bernstein analysts reduce Ant’s valuation to $120 billion from the time of its IPO, due to slower progress expectations and lowered price-to-earnings multiples because of the regulatory modifications.

The firm was valued at $150 billion in its 2018 fundraising that attracted a slew of distinguished world traders.

Ant traders haven’t got excessive hopes that the corporate’s IPO will revive any time quickly, as it’s nonetheless in the course of an advanced restructuring course of that requires regulatory approvals on many fronts, mentioned 4 different folks.

“I would be surprised if Ant could finish its restructuring and revive its IPO by end of 2022,” mentioned one investor source.

Ant declined to touch upon the restructuring course of and the IPO revival plans.

($1 = 6.3854 Chinese yuan renminbi)

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Reporting by Julie Zhu and Kane Wu in Hong Kong and Nikhil Kurian Nainan in Bengaluru; Additional reporting by Cheng Leng in Beijing and Zhang Yan in Shanghai; Editing by Sumeet Chatterjee and Muralikumar Anantharaman

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