BEIJING, Feb. 15, 2016 /PRNewswire/ -- VisionChina Media
Inc. ("VisionChina Media" or the "Company") (Nasdaq: VISN),
China's largest out-of-home
digital television and advertising network on mass transportation
systems and the leading provider of urban mass transit Wi-Fi, today
announced its consolidated variable interest entities VisionChina
Media Group Co., Ltd. ("VisionChina Media Group") and Shenzhen HDTV
Industrial Investment Co., Ltd. ("Shenzhen HDTV") (collectively
"VisionChina Subsidiaries" or the "Sellers"), have entered into an
equity transfer agreement and a profit compensation agreement (the
"Transaction") to sell all of VisionChina Media's subway mobile TV
advertising business ("Target Business") to Ledman Optoelectronic
Co., Ltd. ("Ledman") for an aggregate consideration of RMB780 million (US$119
million) (the "Consideration"). Ledman is a leading
manufacturer and distributor of LED products in China, and listed on the Shenzhen Stock
Exchange (300162.SZ).
Prior to the Transaction, the Sellers completed a restructuring
to transfer the Target Business to VisionChina New Culture Media
Co., Ltd. ("New Culture"), an entity wholly owned by the
Sellers. Since January 1, 2016,
New Culture has been the operating entity of the Target Business.
Upon the closing of the Transaction, Ledman will hold 100% equity
interest of New Culture.
"The sale of our subway mobile TV advertising business is a
crucial strategic step for VisionChina Media. We believe the
transaction will provide significant flexibility to satisfy our
working capital needs and allow us to focus our resources on the
fast growing Wi-Fi business, and to further strengthen our leading
position in China's urban mass
transit Wi-Fi market," commented Mr. Limin Li, VisionChina
Media's Chairman and Chief Executive Officer, "We expect this
transaction will be closed in the near future and are confident
that New Culture will be able to achieve the profit targets
described in the profit compensation agreement."
Sale of Target Business
Pursuant to the equity transfer agreement, Ledman will pay
RMB390 million in cash and the other
RMB390 million in the form of
20,774,680 newly issued shares of Ledman (the "Share
Consideration"), valued at RMB18.8
per share, which is 90% of Ledman shares' average trading price in
the 20 trading days immediately before the public announcement of
the approval of the Transaction by Ledman's board of directors.
Within 60 days after the closing of the Transaction, Ledman will
pay an installment of RMB130 million
in cash. Within 120 days after the closing of the Transaction,
Ledman will pay the remaining amount of RMB260 million in cash. The issuance of Ledman's
shares shall be subject to the China Securities Regulatory
Commission approval. Upon the completion of the Transaction,
VisionChina Media, through the Sellers, will indirectly own
approximately 5.6% of Ledman. The Share Consideration will be
subject to a 36-month lock-up.
VisionChina Subsidiaries and their related parties also agreed
to not engage in any business that competes or may compete with the
Target Business for a period of eight years. The management team
members and other key employees of New Culture have each entered
into an employment contract for a term of five years or more, a
confidentiality agreement and a non-competition agreement pursuant
to which such person have agreed to not engage in the Target
Business or any business that competes or may compete with the
Target Business for a period of three years after the termination
of his or her employment.
Profit Compensation
According to the profit compensation agreement, in the event
that the consolidated net profits attributable to the shareholders
(excluding extraordinary items) of New Culture in any of the fiscal
years 2016, 2017 and 2018 (collectively, the "Covered Period") are
less than the profit target for such fiscal year -
RMB60 million, RMB80 million and RMB100
million, respectively (the "Profit Targets"), VisionChina
Subsidiaries will compensate Ledman for the deficiency by returning
a certain amount of the Share Consideration to Ledman. In the
event that the Share Consideration is not sufficient to compensate
for such deficiency, VisionChina Subsidiaries are required to pay
compensation in cash. The compensation amount will be calculated
based on a pre-determined formula and subject to an aggregate cap
in an amount equal to the amount of the Consideration.
Ledman will allocate 50% of the surplus of the accumulated net
profits of the Target Business in excess of the total Profit
Targets as a bonus to the members of the management team of New
Culture who are still employed at New Culture at the end of the
Covered Period.
The consummation of the Transaction remains subject to the
requisite internal approvals of the relevant parties and regulatory
clearance, including that by the China Securities Regulatory
Commission and other relevant regulatory authorities. There is no
assurance that these approvals or regulatory clearance will be
obtained within the expected time frame, or at all.
About VisionChina Media Inc.
VisionChina Media Inc. (Nasdaq: VISN) operates an out-of-home
advertising network on mass transportation systems, including buses
and subways. As of September 30,
2015, VisionChina Media's advertising network included
approximately 97,757 digital television displays on mass
transportation systems in 18 of China's economically prosperous cities,
including Beijing, Guangzhou and Shenzhen, as secured by exclusive agency
agreements or joint venture contract. VisionChina Media has the
ability to deliver real-time, location-specific broadcasting,
including news, stock quotes, weather and traffic reports, and
other entertainment programming.
In addition, VisionChina Media, through its consolidated
affiliate Qianhai Mobile, has secured exclusive concession rights
for bus Wi-Fi services in 30 cities across China,
including Shanghai, Shenzhen,
Guangzhou and Tianjin, covering approximately 80,000
buses. Currently, Qianhai Mobile provides free Wi-Fi Internet
services on over 30,000 buses under the brand name "VIFI," with
approximately 10 million registered users.
For more information, please visit
http://www.visionchina.cn.
About Ledman Optoelectronic Co., Ltd.
Ledman Optoelectronic Co., Ltd., a professional and leading
manufacturer in China LED industry
listed on the Shenzhen Stock Exchange (300162.SZ), is committed to
developing, manufacturing and marketing high quality, high
brightness LED components, energy efficient LED lighting products,
and indoor & outdoor LED displays. Ledman's core business
covers LED display, LED lighting, LED components, LED energy saving
and LED media.
Safe Harbor Statement
This press release contains forward-looking statements. These
statements constitute "forward-looking" statements within the
meaning of Section 27A of the Securities Act of 1933, as amended,
and Section 21E of the Securities Exchange Act of 1934, as amended,
and as defined in the U.S. Private Securities Litigation Reform Act
of 1995. These forward-looking statements can be identified by
terminology such as "will", "expects", "anticipates", "future",
"intends", "plans", "believes", "estimates" and similar statements.
Among other things, the quotations from management in this press
release contain forward-looking statements. Such statements involve
certain risks and uncertainties that could cause actual results to
differ materially from those in the forward-looking statements.
Further information regarding these and other risks is included in
the Company's filings with the U.S. Securities and Exchange
Commission, including its registration statement on Form F-1 and
its annual report on Form 20-F. The Company does not undertake any
obligation to update any forward-looking statement as a result of
new information, future events or otherwise, except as required
under applicable law.
For investor and media inquiries, please contact:
In China:
Ms. Shuning Yi
Investor Relations Department
VisionChina Media Inc.
Tel: +86-134-2090-9426
E-mail: shuning.yi@visionchina.cn
In the United
States:
The Piacente Group, Inc.
Mr. Don Markley
Tel: +1-212-481-2050
E-mail: visionchina@tpg-ir.com
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SOURCE VisionChina Media Inc.