BEIJING, Oct. 30, 2013 /PRNewswire/ -- AirMedia Group Inc.
("AirMedia" or the "Company") (Nasdaq: AMCN), a leading operator of
out-of-home advertising platforms in China targeting mid-to-high-end consumers,
today announced that AirMedia Group Co., Ltd. ("AM Advertising"),
one of its consolidated entities, has recently entered into a
strategic alliance agreement with HNA Xinhua Culture Holding Group
Co., Ltd. ("HNA Culture"), a subsidiary of HNA Group, to form an
industry development fund of in-flight internet (the "Fund") to
explore the opportunity of in-flight internet service and in-air
multimedia platform.
Such arrangement will include the establishment of a joint fund
management company (the "Joint Fund Management Company"), by AM
Advertising and HNA Culture each holding 50% of the equity interest
therein. The Joint Fund Management Company will act as the general
partner for the Fund.
HNA Culture will be responsible for obtaining exclusive rights
to develop and operate in-flight internet service and in-air
multimedia platform from member airlines of HNA Group. In a power
of attorney, HNA Group authorized HNA Culture to act as the
exclusive general coordinator for HNA Group's in-flight
connectivity project, with full authority to coordinate with all
member airlines of HNA Group, HNA Technik, equipment providers and
satellite service providers in setting up in-flight internet
connectivity for HNA Group-operated airplanes. HNA Group recognizes
the documents executed by HNA Culture on behalf of HNA Group in
relation to the Fund and the Joint Fund Management Company,
including the strategic alliance agreement, as within the scope of
such authorization. HNA Group now operates more than 400 airplanes
on over 570 domestic and international routes that connect more
than 190 cities. Member companies under Hainan Airlines Group
include Grand China Airlines, Hainan Airlines, Tianjin Airlines,
Lucky Air, West Air, Yangtze River Express, my Cargo, Ghana AWA
Airlines, Aigle Azur Airline, HNA Technik, HNA Sales, HNA Aviation
Academy, HNA Cargo, myTECHNIC and others. According to a report
released by the Civil Aviation Administration of China, Hainan Airlines Group had 42 million
air passengers in 2012, representing approximately 13% of the total
air passengers in China in
2012.
AM Advertising will act as a limited partner, primarily in
charge of fundraising and capital contribution for the Fund. The
Fund has a planned fund raising target of approximately
RMB1.0 billion, to be adjusted
according to the Fund's operational needs. AM Advertising alone
commits to invest no less than 40% of the total targeted fund size
in the Fund and to provide the remaining portion of the total
targeted fund size if it cannot secure other limited partners. The
first round of fund raising for the Fund will be RMB400 million, and AM Advertising commits to
invest no less than 60% in the first round.
"We are excited about this strategic development in providing
enriching in-flight entertainment to air passengers and expanding
our revenue sources. Internet has been an integral part of people's
daily life, even for air travelers on the go. We believe more and
more people will have demand and be willing to pay for in-flight
internet connectivity so that they can continue to work,
communicate with friends or enjoy online entertainment while in the
air. According to an online survey of approximately 300 various
Chinese airlines clubs' members conducted by Sinomonitor, a
third-party market research firm, in March
2013, 80.6% of the participants in the survey are willing to
pay for in-flight internet connectivity. Other than connectivity
charges paid by air passengers, we also expect our revenues to come
from advertisements on our in-air multimedia platform, revenues
from self-operated e-commerce transactions or commissions from
sponsored e-commerce companies on our in-air multimedia platform,
and sponsorship from advertisers or internet companies for putting
their contents or services on our in-air multimedia platform. We
believe this business has great potential in China and are happy to partner with HNA Group
to explore this great opportunity," commented Mr. Herman Guo, chairman and chief executive officer
of AirMedia.
About AirMedia Group Inc.
AirMedia Group Inc. (Nasdaq: AMCN) is a leading operator of
out-of-home advertising platforms in China targeting mid-to-high-end consumers.
AirMedia operates the largest digital media network in China dedicated to air travel advertising.
AirMedia operates digital frames in 33 major airports and digital
TV screens in 33 major airports, including most of the 30 largest
airports in China. In addition,
AirMedia sells advertisements on the routes operated by seven
airlines, including the four largest airlines in China. In selected major airports, AirMedia
also operates traditional media platforms, such as billboards and
light boxes, and other digital media, such as mega LED screens. In
addition, AirMedia has obtained exclusive contractual concession
rights until the end of 2020 to develop and operate outdoor
advertising platforms at Sinopec's service stations located
throughout China. For more
information about AirMedia, please visit
http://www.airmedia.net.cn.
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," "expect," "anticipate," "future," "intend," "plan,"
"believe," "estimate," "confident" and similar statements. Among
other things, the Business Outlook section and the quotations from
management in this announcement, as well as AirMedia Group Inc.'s
strategic and operational plans, contain forward-looking
statements. AirMedia may also make written or oral forward-looking
statements in its reports to the U.S. Securities and Exchange
Commission, in its annual report to shareholders, in press releases
and other written materials and in oral statements made by its
officers, directors or employees to third parties. Statements that
are not historical facts, including statements about AirMedia's
beliefs and expectations, are forward-looking statements.
Forward-looking statements involve inherent risks and
uncertainties. A number of important factors could cause actual
results to differ materially from those contained in any
forward-looking statement. Potential risks and uncertainties
include, but are not limited to: if advertisers or the viewing
public do not accept, or lose interest in, AirMedia's air travel
advertising network, AirMedia may be unable to generate sufficient
cash flow from its operating activities and its prospects and
results of operations could be negatively affected; AirMedia
derives most of its revenues from the provision of air travel
advertising services, and any slowdown in the air travel
advertising industry in China may
materially and adversely affect its revenues and results of
operations; AirMedia's strategy of expanding its advertising
network by building new air travel media platforms and expanding
into traditional media in airports may not succeed, and its failure
to do so could materially reduce the attractiveness of its network
and harm its business, reputation and results of operations; if
AirMedia does not succeed in its expansion into gas station,
in-flight internet services and in-air multimedia platform or other
outdoors media advertising, its future results of operations and
growth prospects may be materially and adversely affected; if
AirMedia's customers reduce their advertising spending or are
unable to pay AirMedia in full, in part or at all for a period of
time due to an economic downturn in China and/or elsewhere or for any other
reason, AirMedia's revenues and results of operations may be
materially and adversely affected; AirMedia faces risks related to
health epidemics, which could materially and adversely affect air
travel and result in reduced demand for its advertising services or
disrupt its operations; if AirMedia is unable to retain
existing concession rights contracts or obtain new concession
rights contracts on commercially advantageous terms that allow it
to operate its advertising platforms, AirMedia may be unable to
maintain or expand its network coverage and its business and
prospects may be harmed; a significant portion of AirMedia's
revenues has been derived from the six largest airports and four
largest airlines in China, and if
any of these airports or airlines experiences a material business
disruption, AirMedia's ability to generate revenues and its results
of operations would be materially and adversely affected;
AirMedia's limited operating history makes it difficult to evaluate
its future prospects and results of operations; and other risks
outlined in AirMedia's filings with the U.S. Securities and
Exchange Commission. AirMedia does not undertake any obligation to
update any forward-looking statement, except as required under
applicable law.
Investor Contact:
Raymond Huang
Senior Director of Investor Relations
AirMedia Group Inc.
Tel: +86-10-8460-8678
Email: ir@airmedia.net.cn
SOURCE AirMedia Group Inc.