Ant Group to offer interest-free loans to employees in bid to prevent exodus after shelved IPO

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The loans will be backed by eligible employees’ restricted stock options, which will be valued at levels calculated after a 2018 funding round, said people familiar

Ant’s executives are trying to halt a potential exodus of staff, who had expected a windfall with the company just days away from listing in Shanghai at a US$280 billion valuation

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Ant’s executives are trying to halt a potential exodus of staff. Photo: Reuters

Bloomberg

Published: 8:30pm, 26 Apr 2021Updated: 8:30pm, 26 Apr 2021

Jack Ma’s Ant Group plans to offer zero-interest loans to employees who own illiquid stock options, seeking to boost morale after the company’s landmark initial public offering was suspended in November, people familiar with the matter said.

The loans will be backed by eligible employees’ restricted stock options, which will be valued at levels calculated after a 2018 funding round, the people said, asking not to be identified discussing private information. That will allow Ant to give staff access to liquidity without requiring the company to establish a more up-to-date valuation for its shares.

The options, known as Share Economic Rights with each representing 5.53 shares, will be priced at 195 yuan (US$30.05) or 35.26 yuan a share, in line with an internal buyback price from 2018, the people said. Ant was valued at US$150 billion at the time.

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Ant’s executives are trying to halt a potential exodus of staff, who had expected a windfall with the company just days away from listing in Shanghai at a US$280 billion valuation. Chairman Eric Jing assured employees in March that the firm would eventually go public and promised a “short-term liquidity solution” that would take effect this month.

Details of the loan program will probably be announced in the next few days, the people said. Ant declined to comment via email.

The company suspended its share buyback program for current and departing staff last year to prepare for its IPO. It needs to compete for talent with China’s other technology behemoths including Tencent Holdings and e-commerce giant Meituan, which have seen their shares climb as Ant battles a regulatory overhang.

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The future of Jack Ma’s company – and its valuation – has been shrouded in uncertainty as regulators sort through details of a fintech industry overhaul that abruptly halted Ant’s US$35 billion IPO in November. The company has since committed to drastically revamping its business and seen its chief executive officer Simon Hu exit.