ChinaCache Announces Definitive Agreements to Sell Data Center Assets
March 06 2017 - 8:00AM
ChinaCache International Holdings Ltd. (“ChinaCache” or the
“Company”) (Nasdaq:CCIH), the leading total solutions provider of
Internet content and application delivery services in China, today
announced that it has entered into definitive agreements to sell
79.0% equity interest of ChinaCache Xin Run Technology (Beijing)
Co., Limited (“Xin Run”) to Tianjin Shuishan Technology Co., Ltd.
(“Tianjin Shuishan”), Shanghai Qiaoyong Equity Investment Fund
Management Co., Ltd. (“Shanghai Qiaoyong”) and Tianjin Dingsheng
Zhida Technology Co., Ltd. (“Tianjin Dingsheng”), for a total
consideration of RMB221.2 million in cash before fees and expenses.
Xin Run owns and operates ChinaCache’s Internet data center
business.
Pursuant to the agreements, Tianjin Shuishan,
Shanghai Qiaoyong and Tianjin Dingsheng agree to purchase 47.67%,
26.33% and 5.0%, respectively, of the equity interest in Xin Run
for a consideration of RMB133.5 million, RMB73.7 million and
RMB14.0 million, respectively. Shanghai Qiaoyong may designate a
self-established fund as general partner, Tianjin Shuishan and
Tianjin Dingsheng may respectively designate wholly-owned
subsidiaries, to complete the transaction. After completion of the
transaction, ChinaCache will, through a subsidiary, own 20.0%
equity interest of Xin Run and will cease to consolidate the
financial results of Xin Run and its subsidiaries. As of September
30, 2016, Xin Run had a shareholders’ equity value of approximately
RMB14.8 million and a registered capital of approximately RMB126.6
million. ChinaCache plans to apply the proceeds from the
transaction to R&D, working capital and other purposes.
“This transaction will significantly strengthen
our balance sheet. In addition, by divesting the majority interest
in this capital intensive business, we can focus on our asset-light
and technology-driven CDN business,” commented Mr. Song Wang,
Chairman and Chief Executive Officer of ChinaCache.
“We believe the transaction will enable Xin Run
to achieve growth and unlock value, which may further benefit our
shareholders. After the transaction, ChinaCache and Xin Run may
explore partnership opportunities to provide our enterprise
customers with premium total solutions,” concluded Mr. Wang.
Tianjin Shuishan and Tianjin Dingsheng are
controlled by Mr. Song Wang, Chairman of the Board of Directors and
Chief Executive Officer of ChinaCache. Tianjin Shuishan will obtain
a loan from Shanghai Qiaoyong or its affiliates to finance its
acquisition.
The completion of the transaction is subject to
customary closing conditions, including obtaining of requisite
governmental registration. The transaction has been approved by the
Board of Directors of the Company, acting upon the unanimous
recommendation of its audit committee, consisting of independent
and disinterested directors. The Company has terminated the
agreement to sell 60.0% of Xin Run as disclosed in its press
release on December 2, 2015.
About ChinaCache International Holdings
Ltd.
ChinaCache International Holdings Ltd.
(Nasdaq:CCIH) is the leading total solutions provider of Internet
content and application delivery services in China. As a
carrier-neutral service provider, ChinaCache's network in China is
interconnected with networks operated by all telecom carriers,
major non-carriers and local Internet service providers. With more
than a decade of experience in developing solutions tailored to
China's complex Internet infrastructure, ChinaCache is a partner of
choice for businesses, government agencies and other enterprises to
enhance the reliability and scalability of online services and
applications and improve end-user experience. For more information
on ChinaCache, please visit ir.chinacache.com.
Safe Harbor Statement
This announcement contains forward-looking
statements. These statements are made under the "safe harbor"
provisions of 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.
ChinaCache may also make written or oral forward-looking statements
in its reports filed or furnished to the U.S. Securities and
Exchange Commission, in its annual reports to shareholders, in
press releases and other written materials and in oral statements
made by its officers, directors or employees to third parties.
Forward-looking statements involve inherent risks and
uncertainties. A number of factors could cause actual results to
differ materially from those contained in any forward-looking
statements, including but not limited to the following: the
Company's goals and strategies, expansion plans, the expected
growth of the content and application delivery services market, the
Company's expectations regarding keeping and strengthening its
relationships with its customers, and the general economic and
business conditions in the regions where the Company provides its
solutions and services. Further information regarding these and
other risks is included in the Company's filings with the U.S.
Securities and Exchange Commission. All information provided in
this press release is as of the date of this press release, and
ChinaCache undertakes no duty to update such information, except as
required under applicable law.
For investor and media inquiries please contact:
Investor Relations Department
ChinaCache International Holdings
Tel: +86 10 6408 5307
Email: ir@chinacache.com
Mr. Ross Warner
The Piacente Group | Investor Relations
Tel: +86 10 5730-6200
Email: chinacache@tpg-ir.com
Ms. Brandi Piacente
The Piacente Group | Investor Relations
Tel: +1 212-481 2050
Email: chinacache@tpg-ir.com
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