LeTV to Raise RMB 7.5 Bln through Private Placement
LeTV, 5/26/15
Chinese online video and internet TV content provider LeTV (Leshi) (300104.SZ) has announced a plan to raise up to RMB 7.509 bln through a private offering of additional shares to no more than five designated investors. The 200 mln shares will be offered at a 50% discount over market price, or RMB 37.5 per share. According to the proposal, the raised capital will be used for the construction of a video content library (RMB 4.4 bln), research and development of platform application technology (RMB 991 mln), development of a brand marketing system (RMB 518 mln), repayment of bank loans (RMB 600 mln), and increasing working capital by RMB 1 bln. This proposal cancels the previous plan for a private offering of additional shares announced in August 2014.
Furthermore, Leshi Chairman and CEO Jia Yueting proposes to reduce his shareholdings over the next six months (May 29-November 28) as needed to reduce cash flow pressures for the company. Jia will sell up to 148 mln shares, or approximately 8% of Leshi's outstanding shares. Jia will then lend the money, which will be used for daily operations, to Leshi for a period of no less than 5 years at a zero percent interest rate.
Editor's Note: According to Chinese economist Song Qinghui, Jia Yueting's plan to sell a block of shares with combined value of RMB 11-digits could have a profound effect on the ChiNext, China's NASDAQ-style growth enterprise board on the Shenzhen Stock Exchange, which lists Leshi.
Editor's Note: For more information on this topic, please see "LeTV Raises RMB 4.5 Bln through Private Placement," MD 8/08/14 issue.
Keywords: financing Song Qinghui Internet online video LeTV Internet TV Jia Yueting 300104.SZ Leshi television
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