Tencent Offers Options to Domain Network CEO
DoNews, 8/06/08
Chinese Internet, mobile and telecommunications value-added services provider Tencent (0700.HK) has announced that it plans to provide Zhang Yan, the CEO of its majority-owned subsidiary Shenzhen Domain Network, with a loan to purchase shares in Domain, as well as provide Zhang with put options on the company.
The loan will be for RMB 73.1 mln, to be repaid within 3 years, although this period may be extended to 5 years under certain circumstances. Zhang will use the loan to purchase a 15.6% stake in Domain, with the stake being used as collateral for the loan.
Tencent will also offer Zhang long-term put options on Domain. Under the terms of the agreement, if Domain is unable to list publicly by December 31, 2010, another one of Tencent's subsidiaries, wireless value-added service provider Shiji Kaixuan, will agree to purchase Zhang's entire stake in Domain. In addition, as long as net profit from the 2010 financial year has not decreased more than 20% over the previous year, Zhang can require that Shiji Kaixuan purchases the stake for 6 times the value of the company, based on the valuation of the company from the previous financial year, to be paid within 3 years.
Tencent currently owns a 19.9% stake in Domain, with its subsidiary Shiji Kaixuan owning another 49.1% stake, bringing Tencent's total stake in Domain to 60%.
Keywords: online gaming HR Zhang Yan Shiji Kaixuan 0700.HK Internet Shenzhen Domain Network Tencent wireless SP WVAS
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