11 Jan 2010 11:49

GBS to sell 11.76 pct stake in HappiGo for $14.67 mln

Shanghai. January 11. INTERFAX-CHINA - Golden Eagle Broadcasting System (GBS), Hunan Province's sole broadcaster and the operator of Hunan TV, will sell a 11.76 percent stake in its TV shopping unit HappiGo, for RMB 100 million ($14.67 million), according to a Jan 11 post on the Hunan Assets and Equity Exchange Web site.

GBS will sell the stake in HappiGo currently held by its wholly-owned investment subsidiary GBS Investment Holdings Co. Ltd., according to the post.

Potential investors should be Chinese firms approved by both China's State Council and the National Development and Reform Commission (NDRC), and are required to have completed RMB 2 billion ($293.26 million) in investments as of Dec. 31, 2009.

Xu Yaowen, an industry analyst with Galaxy Securities, told Interfax on Jan. 11 that GBS may still be attempting to pursue a strategic plan of inserting businesses into its Shenzhen-listed arm, Hunan TV & Broadcast Intermediary Co. Ltd. (TIK). Previous restructuring deals were suspended due to policy issues, according to Interfax reports.

Interfax reported in 2008 that GBS would insert competitive core businesses into TIK, a move which made it the first TV company in mainland China to publicly list content-related assets.

According to Xu, TIK is not only a cable TV network operator, but also an investment company which has invested in over 50 companies since 2000 through its wholly-owned subsidiary, Fortune Venture Capital.

"GBS has been actively restructuring its subsidiaries in recent years, in an attempt to spin off its core businesses and get them listed on stock exchanges," Xu said.

HappiGo generated a total revenue of RMB 1.14 billion ($167.16 million) and a net profit of RMB 50.87 million ($7.46 million) within the first ten months of 2009, with its total assets valued at RMB 508.31 million ($74.53 million) as of Oct. 31, 2009, according to the Jan 11 post.