Chinese consumer electronics manufacturer Skyworth Digital Holdings (0751.HK) announced on June 24 that Skyworth Group subsidiary Skyworth-BVI has sold a 40% stake in its mobile handset subsidiary, Skyworth Mobile Communications (Shenzhen), to Shenzhen Baoyi Communication (one of Skyworth Mobile's suppliers). At the same time, another Skyworth subsidiary, Skyworth-RGB, which held a 60% stake in Skyworth Mobile, has sold a 40% stake in the company to Shine Success, an affiliate company of Shenzhen Baoyi Communication. The prices were HKD 1.13 and HKD 1 respectively. After the transaction, Skyworth Group holds only a 20% stake in Skyworth Mobile.
Under the terms of the sale, Skyworth-RGB will inject a further RMB 40 mln into the company and Baoyi and Shine Success will inject a minimum of RMB 50 mln, to meet the company's operating needs.
Skyworth stated the reason for the sale was poor performance. By May 31, 2008, Skyworth Mobile had net liabilities of RMB 130 mln.