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China Digital TV scraps asset restructuring
US-listed China Digital TV has scrapped a complex asset restructuring deal for its conditional access firm with China’s Tongda Venture Capital, after missing its 31 December deadline. Tongda was unable to get the nod from the China Securities Regulatory Commission within the validity period of its shareholders’ approval.
US-listed China Digital TV (NYSE:STV) has scrapped a complex asset restructuring deal with China’s Tongda Venture Capital (SHA:600647) after missing its 31 December deadline.
The group planned to sell 25% of its conditional access firm Beijing Super TV to Tongda to help alleviate regulatory issues that the US-listed, but China-focused conditional access smart card supplier faces.
The deal would have given Tongda, controlled by asset management firm Cinda Investment, 100% of the group. China Digital TV’s Golden Benefit unit would have received a stake of around 17% in Tongda worth Yn800m (US$122m), as well as Yn2.4bn (US$367m) in cash.
The Chinese government principally agreed that China Digital TV’s stake in Beijing Super TV could be used to buy Tongda shares in July, however, the latter failed to get the nod from the China Securities Regulatory Commission within the validity period of its shareholders’ approval.
China Digital TV had repeatedly warned during the year-long restructuring process about uncertainties surrounding its ability to complete the deal, noting the increasingly stringent standards that regulators in China have showed for similar transactions.
In approving the move in principle last year, China’s Ministry of Commerce said Tongda would need to divest its equity in a culture and media company called Beijing CNLive Culture Media, which is not allowed to have foreign investment.
Cinda would have been given the option to buy China Digital TV’s Beijing Cyber Cloud and Beijing Joysee Technology subsidiaries under the failed plan.
