PR Newswire Asia, 4/01/11
Chinese online media provider and online game operator Shanda Interactive (Nasdaq: SNDA) announced today that it has agreed to invest USD 100 mln in its online video site subsidiary Ku6 (Nasdaq: KUTV) in the form of ordinary shares and senior convertible bonds.
Shanda agreed to subscribe for USD 50 mln of ordinary shares of Ku6 at a per share price of USD 0.0325 (or USD 3.25 per ADS) and USD 50 mln aggregate principal amount of 3-year senior convertible notes at face value. The bonds will bear an interest rate of 3% per annum, payable semi-annually. The bonds will be convertible into ordinary shares of Ku6 at a price of USD 0.03925 per ordinary share (or USD 3.925 per ADS). The conversion rights will start after 6 months following the closing date. The transaction is subject to the approval of the shareholders of Ku6. Closing is expected in the second quarter of 2011.
Ku6 intends to use the net proceeds from the sale of the convertible bonds and ordinary shares for business expansion, working capital and other general corporate purposes.
A special committee comprised of three independent directors of Ku6 represented Ku6 in the negotiations of the transaction agreements.