BEIJING, April 29, 2015 /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, as well as
a first-mover in the in-flight and on-train Wi-Fi market, today
released the following letter from Herman
Guo, its chief executive officer to shareholders to respond
to allegations raised in an article posted on seekingalpha.com on
April 28, 2015. The Company believes
that the allegations and accusations set forth in the article are
false and inaccurate and contain numerous errors of facts,
misleading speculations and malicious interpretations of
events.
Letter from the CEO
Dear shareholders,
Before clarifying the facts, first, I would like to share with
you my thoughts and motivation behind the transaction we announced
on April 7, 2015 (the "Transaction")
to sell 5% equity interest of our PRC affiliated entity, AirMedia
Group Co., Ltd. ("AM Advertising") to Shenzhen Liantronics Co.,
Ltd. ("Liantronics"). As you know, we endeavor to transform into a
leading in-flight and on-train Wi-Fi operator in China. We
believe our Wi-Fi business will have tremendous growth and
monetization potential when hundreds of millions of passengers use
our Wi-Fi services when they travel. As for our current advertising
business, we noted the wide valuation gap between China's local stock exchanges and U.S. stock
exchanges and would like to capitalize on the sale of our
advertising business at a much more attractive valuation to
companies in China. We intend to
sell the remaining equity interests of our advertising business in
the foreseeable future so that we can focus our resources on the
exciting Wi-Fi business.
AirMedia and Liantronics are listed companies in the United States and China, respectively. The Transaction
between the two companies is arms-length and serious.
The claim that Liantronics has not even conducted due diligence
in connection with the Transaction is erroneous. In contrary,
Liantronics engaged a major PRC accounting firm, a recognized PRC
law firm, a qualified PRC assets appraisal company and a recognized
PRC financial advisory firm to conduct due diligence of AM
Advertising in March 2015.
In connection with the Transaction, we requested and have
obtained a call option which provides that "during the period of 75
calendar days after Shengshi Lianhe receives full payment from
Liantronics (the "Waiting Period"), we may elect to sell our equity
interest in AM Advertising to third parties, and if we so elect,
Shengshi Lianhe will repurchase such 5% equity interest from
Liantronics for an amount equal to RMB150
million plus applicable fees." Several unrelated parties
have expressed interest in buying equity interests of our
advertising business and we would like to preserve the ability to
evaluate other potential offers and enter into transactions with
the party or parties that will give us the most satisfactory
terms.
In exchange for our call option, Liantronics requested and has
obtained a put option to revoke the Transaction after the
expiration of the Waiting Period.
Although AirMedia had consolidated net loss, our stand-alone
digital frames, mega-size LED screens, traditional media in
airports and unipole sign and other outdoor media out of airports,
which will be the business lines left in AM Advertising after we
sell the advertising business, have been profitable for years and
we believe they will continue to be profitable in 2015.
I would also like to take this opportunity to give our sincere
thanks to our long term shareholders for supporting us. According
to the most recent list of institutional shareholders by Nasdaq.net
as shown below, institutional shareholders hold 20.78 million ADSs
of AirMedia and our top 10 institutional shareholders hold 31.78%
of AirMedia's total issued and outstanding shares.
In closing, our in-flight and on-train Wi-Fi business is still
at an early stage of development while we are obtaining more
concession rights and strengthening our market position. We expect
to install and operate Wi-Fi services on more ordinary trains and
high-speed trains in 2015, and start monetizing this unique Wi-Fi
business. Similar to most internet companies, our new Wi-Fi
business may have a period of loss at the early stage, but we
believe tremendous growth opportunities are ahead of us.
We plan to arrange meetings with investors in Hong Kong and United
States in late May and early June after our first quarter
earnings release. Look forward to seeing you on the road.
Herman Guo
Chief Executive Officer
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, as
well as a first-mover in the in-flight and on-train Wi-Fi market.
AirMedia operates the largest digital media network in China dedicated to air travel advertising.
AirMedia operates digital frames in 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-size 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.
AirMedia, which is in the process of transforming into a leading
in-flight and on-train Wi-Fi operator in China, has obtained
concession rights to install and operate Wi-Fi systems on the
airplanes operated by Hainan Airlines Group and on the trains
operated by several main railway bureaus in China, including Beijing Railway Bureau,
Shanghai Railway Bureau and Guangzhou Railway (Group)
Corporation.
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
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SOURCE AirMedia Group Inc.