Caixin News Agency, July 4th (Reporter Zou Juntao) Lujin will once again become a subsidiary of China Ping An Holdings.
On the evening of July 3rd, Ping An Securities of China (601318. SH) announced that due to its wholly-owned subsidiary choosing to pay dividends through shares in the special dividend distribution of Lufax (Hong Kong Stock Exchange Securities, abbreviated as Lukong, 6623. HK), Ping An Securities of China's holdings in Lufax increased to 56.82%, and will passively merge with Lufax, triggering a mandatory comprehensive offer under the Hong Kong Takeover Code.
It is understood that Lufax was once an Internet finance company held by Ping An of China, which was split up and independent around 2020, and listed on the New York Stock Exchange and Hong Kong Stock Exchange successively. This time, China Ping An passively consolidated its controlling stake in Lufax. China Ping An has stated that it will not intervene in Lufax's operations and has no intention of privatization.
On the evening of that day, Ping An of China responded to a reporter from Caixin that Lujin Exchange would give back to investors and distribute special dividends. As the major shareholder, Ping An chooses to receive the special dividend through stock dividends and passively consolidates its controlling stake in Lufax. This choice is positive for both Ping An and Lufax, demonstrating Ping An Group's confidence in Lufax's long-term development prospects.
Passive consolidation of Lujiazui, China Ping An claims no intention of privatization
On the evening of July 3rd, Ping An Insurance of China issued a cautionary announcement regarding the inclusion of Lujin Holdings Limited (referred to as "Lujin") in the scope of consolidated financial statements, stating that the shareholders' meeting of Lujin approved the company to declare and distribute special dividends (referred to as the "Special Dividend Plan") from the reserve share premium account, and eligible shareholders can choose to receive all special dividends in the form of new shares (referred to as "share based interest").
As of the announcement date, Ping An of China, through its wholly-owned subsidiaries An Ke Technology Company Limited (referred to as "Anke Technology") and China Ping An Insurance Overseas (Holdings) Limited (referred to as "Ping An Overseas Holdings"), holds a total of 41.40% equity in Lufax. According to the special dividend plan, Anke Technology and Ping An Overseas Holdings have chosen to pay dividends through shares, and will receive a total of 509880257 new shares issued by Lujin.
According to the announcement, according to the final selection result of the special dividend plan of Lujinsuo, after the completion of this special dividend distribution, the equity proportion of Lujinsuo held by Ping An through the aforementioned subsidiary will increase to 56.82%. Therefore, Ping An China stated in the announcement that Lujin will become a controlling subsidiary of the company and be included in the consolidated financial statements. The inclusion of Lujin in the consolidated financial statements will not have a significant impact on the company's financial condition and operating results.
On the evening of the same day, Ping An and Lujin's Hong Kong Stock Exchange issued a joint announcement, stating that after Lujin's tender delivery, Ping An hopes that Lujin will continue its main business. Ping An China has no intention of redeploying any fixed assets of Lufax Group (excluding those carried out in the daily and general business processes of Lufax Group) or terminating the employment of employees of Lufax Group.
At the same time, Ping An of China has no intention of privatizing Lufax and believes that there is no reasonable possibility of privatizing Lufax, and intends to maintain the listing of Lufax on the Hong Kong Stock Exchange and the New York Stock Exchange. In addition, Ping An Securities of China has no intention of using any power to forcibly acquire any outstanding shares of Lufax after the tender delivery of Lufax.
Four years ago, Lufax was spun off from Ping An and listed separately
According to public data, Lufax was incorporated in the Cayman Islands on December 2, 2014, and has rapidly grown into the largest Internet finance enterprise in China relying on Ping An Group. In November 2017, Chen Xinying, then Deputy CEO and Chief Information Officer of Ping An Insurance, stated in an interview with the Hong Kong Economic Daily that she would actively consider splitting Lufax and listing it independently when it had sufficient scale.
On October 30, 2020, Lufax was spun off and officially listed on the New York Stock Exchange in the United States. In April 2021, Lufax submitted a Form 20-F document to the US SEC, which showed that as of February 22, 2021, Tun Kung Company Limited held 39% of the shares, while Ping An Group of China held 38.6% of the shares.
In April 2023, Lufax was listed again on the Hong Kong Stock Exchange. According to the prospectus, Ping An of China holds 41.4% of the shares, while Tun Kung Company Limited holds 28.3%. According to media reports at the time, Lujin stated that Ping An Group is a long-term business partner and strategic shareholder of the company. The relationship between the company and Ping An Group has established a business model that is difficult to replicate, while not compromising operational autonomy.
The official website of Lujinsuo currently shows that the company is a leading financial service empowerment institution for small and micro business owners in China, and a joint venture of China Ping An Group, providing convenient channels for small and micro business owners to obtain inclusive products and services. As of the end of June 2023, Lujin Holdings has provided loan services to over 19.7 million people and managed a loan balance of 426.4 billion yuan.