By Liza Lin
Chinese e-commerce major JD.com Inc. said it was exploring a spinoff of its internet finance unit to facilitate the expansion of the business in its home market as it reported a third-quarter loss.
JD.com, China's second-largest online retailer, is aiming to selling its whole stake in JD Finance to Chinese investors, including the parent company's chairman, Richard Liu, it said Tuesday in a statement.
JD's online finance subsidiary would be fully owned by Chinese investors after such a sale, allowing it to expand its operations in certain licensed financial-services businesses in mainland China, it said.
The Beijing-based company said third-quarter losses had widened by 51% to $121 million from a year ago. Revenue in the third quarter was $9.1 billion, and is expected to be between 75.0 billion and 77.5 billion yuan ($10.9 billion-$11.3 billion) in the fourth quarter, the company said.
JD.com is one of several internet companies seeking to tap credit demand among consumers and small and medium-size businesses in mainland China. JD.com and fellow majors Alibaba Group Holding Ltd. and Tencent Holdings Ltd. have been ramping up efforts to raise funds and expand their payment and digital-banking platforms.
Launched in 2013, JD Finance offers a range of financial services and products to consumers and small businesses in China. Last year, it joined with U.S.-based ZestFinance to provide credit risk evaluation to Chinese companies.
In January, JD Finance raised 6.65 billion yuan in financing from investors such as venture-capital firm Sequoia Capital China and China Taiping Insurance. The fundraising valued the business at 46.65 billion yuan on a fully diluted, postinvestment basis, JD.com said at the time.
Mr. Liu, the founder of the online sales platform that sells everything from electronics to apparel, would likely participate in the sale by acquiring a minority stake in JD Finance, JD.com said. Mr. Liu would purchase shares at the same market pricing as third-party investors and intends to own the majority of the voting rights in the finance unit after the sale, the company said.
Nasdaq-listed JD.com said that in a selloff of its JD Finance stake it would receive cash from investors and 40% of any pretax profit from the business on a cumulative basis.
Wal-Mart Stores Inc. owns 10.8% of JD.com shares that don't have extra voting power, the U.S. retailer said in a regulatory filing in October.
Write to Liza Lin at firstname.lastname@example.org
(END) Dow Jones Newswires
November 15, 2016 08:15 ET (13:15 GMT)
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