Oriental Morning Post, 4/12/12
On the evening of April 11, Chinese telecom equipment manufacturer Datang Telecom (600198.SH) released a preliminary plan for issuing non-circulating shares to the China Academy of Telecommunication Technology (CATT) - its majority shareholder - and other parties in exchange for a 99.36% stake in TD-SCDMA chip maker Leadcore Technology, a subsidiary of Datang Telecom's parent company Datang Group, a 49% stake in mobile phone design and manufacturing firm Shanghai Uniscope Technologies, and 100% of its subsidiary Qidong Uniscope Electronics, in order to resolve issues of competition with shareholders. The stake in Leadcore is valued at RMB 1.63 bln, while the 49% share of Uniscope Technologies is valued at RMB 210 mln, and Qidong Uniscope Electronics at RMB 73 mln. In 2011, Leadcore had net profits of RMB 116.29 mln. Net profits for Uniscope Technologies totaled RMB 66.49 mln last year, and net profits for Qidong Uniscope Electronics totaled RMB 7.4 mln, for total 2011 net profits of RMB 155.52 mln for the three companies combined.
After the deal is completed, Datang Telecom will own 99.36% of Leadcore, 100% of Uniscope Technologies (in which it currently already owns a 51% stake), and 100% of Qidong Uniscope Electronics.
Editor's Note: For more background on this topic, please see "Datang Telecom to Wholly Acquire Leadcore, Uniscope" MD 3/19/12 issue.