JD.com to sell fi­nance arm for 14b yuan

New Straits Times - - Business -

JD.com Inc agreed to sell its fi­nance arm for 14.3 bil­lion yuan (RM9.35 bil­lion) in cash while re­tain­ing a share of its fu­ture prof­its, part of a deal to spin off the fast-grow­ing divi­sion.

The sale and spinoff of JD Fi­nance would be com­pleted by the mid­dle of this year, said the com­pany on Thurs­day without nam­ing buy­ers or in­vestors, apart from chief ex­ec­u­tive of­fi­cer Richard Liu.

The co-founder said in Novem­ber he in­tended to split fi­nance away from its core e-com­merce busi­ness, a sim­i­lar struc­ture to what Alibaba Group Hold­ing Ltd has with af­fil­i­ate Ant Fi­nan­cial.

A spokesman for JD.com said the deal val­ued the spun-off unit at more than 50 bil­lion yuan.

The deal was out­lined as JD.com re­ported rev­enue that beat an­a­lysts’ es­ti­mates.

A spinoff would cre­ate a pow­er­house ca­pa­ble of pro­vid­ing a host of loan, se­cu­ri­ties and in­surance prod­ucts, said Liu.

It would help it gain the nec­es­sary reg­u­la­tory li­cences by rais­ing money solely from do­mes­tic in­vestors. JD Fi­nance last raised funds last year at a val­u­a­tion of about US$7 bil­lion.

Hiv­ing off JD.com’s en­tire 68.6 per cent stake in JD Fi­nance may also make the e-com­merce op­er­a­tor it­self at­trac­tive to in­vestors.

Un­der the deal, Liu will take about 4.3 per cent of the unit, but main­tain a ma­jor­ity of vot­ing rights through proxy agree­ments.

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