TV giant gets shares for debt
(Shanghai Daily)
Updated: 2006-10-11 09:45 TV manufacturing giant
Sichuan Changhong Electric Co Ltd has taken a 29.9 percent stake in China Data
Broadcasting Holdings Ltd from its former US distributor, Apex Digital Inc, as
part of Apex's payment for US$170 million in debt.
The Sichuan-based producer said it has received 95.37 million shares in the
Hong Kong-listed China Data Broadcasting - a company which Apex acquired in May
2003, at 72 Hong Kong cents (9 US cents) a share via the transfer, according to
a statement posted on the Shanghai Stock Exchange yesterday. The payment totaled
US$8.8 million.
"The good thing is Changhong will have direct access to the Hong Kong market
via the stake transfer, which will help its future expansion," said Zhang Qi,
analyst at Haitong Securities Co.
"But even with the transfer, the Sichuan producer is still not the biggest
shareholder in China Data broadcasting, which means it still needs to get
approval from the board of directors if it wants to issue new equities to raise
money from the Hong Kong market."
Apex Digital holds a 51.95 percent stake, and Apex Chairman Ji Longfen holds
a 18.14 stake in China Data Broadcasting, according to CDB's 2005 annual report
released last month.
Changhong has been in a dispute with Apex Digital since 2004 after the US
distributor failed to pay the producer US$457.6 million in bills.
The Sichuan firm in December 2004 filed a lawsuit against APEX in a Los
Angeles, California, court for not repaying the debt.
The two companies, which started partnership in 2001 to sell low-end TVs made
by Changhong in the US market, signed a settlement agreement in April this year
to end the lawsuit and fixed the debt payment at US$170 million.
"The payment, still in process, also includes cash, brand transfer and future
restructuring of China Data Broadcasting," Changhong said yesterday in the
statement.
APEX has given its Apex and Apex Digital brands to Changhong to cover part of
the company's debt.
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