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HONG KONG, Feb 26, 2016 - (ACN Newswire) - Neo Telemedia Limited ("Neo Telemedia" or the "Group"; stock code: 8167), with Internet and big data as its core businesses, has entered into an agreement with OAF (BJ) Limited ("OAF") and conditionally agreed to sell the entire issued share capital of HCH Investments Limited ("HCH"), which wholly owns Hughs China Holdings Company Limited, to OAF at a consideration of HK$156,000,000.
Upon completion of the agreement, the Group will cease to have an equity interest in HCH. The financial results of HCH will no longer be consolidated in the financial statements of the Group. The Group is expected to record a gain on disposal of approximately HK$141.5 million, after taking into account the audited consolidated net assets of the HCH of approximately HK$14.5 million as at 31 December 2015.
Given that HCH has recorded a continuous loss for two financial years ended 31 December 2014 and 31 December 2015, and the continuous delay in obtaining funding from HughesNet China Company Limited (a subsidiary that is 45% indirectly owned by the Group and the operating entity of HCH) for the development of two major projects, namely "Tian Di Xing" and "Meng Gu Bao" of HCH which has substantially hindered the investment return of the Group from HCH, the Group considers the disposal to be a good opportunity for the Group to realize its investment in HCH. This will also allow the Group to devote greater time and resources in developing its other existing businesses.
The proceeds from the disposal are intended to repay the loan due to OAF and the inter-companies outstanding balances of HCH, as well as to be used the general working capital of the Group. The repayment of the loan and outstanding balances would reduce the interest burden of the Group. This disposal is therefore in the interests of the Company and the shareholders as a whole.
Upon receiving consent from 55% of the shareholders of Hughes UnifiedNet Holding (China) Company Limited for the disposal within one month from the agreement, including settlement of the outstanding amount as set out in the agreement, the disposal will thereby be completed.
Contact:
Strategic Financial Relations Limited
Joanne Lam Tel: 852-2864 4816 Email: joanne.lam@sprg.com.hk
Caley Chan Tel: 852-2864 4950 Email: caley.chan@sprg.com.hk
Abigail So Tel: 852-2114 4318 Email: abigail.so@sprg.com.hk
Fax: 852-2527 1196
Topic: Press release summary
Source: Neo Telemedia Limited
Sectors: Media & Marketing, Daily Finance, Daily News
https://www.acnnewswire.com
From the Asia Corporate News Network
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