The complex restructuring of China Digital TV’s conditional access and digital broadcasting solutions business will need to be adjusted after hitting a roadblock.
The company said the adjustments are still subject to negotiations, although there is no…
The complex restructuring of China Digital TV’s conditional access and digital broadcasting solutions business will need to be adjusted after hitting a roadblock.
The company said the adjustments are still subject to negotiations, although there is no assurance that a deal “will be reached soon or at all”.
Under the original plan, announced on 13 June, the NYSE-listed group was to transfer the assets to a unit called Tongda Venture, controlled by asset management firm Cinda Investment, in return for RMB1.15bn (US$185m) in cash and a controlling stake in it.
That deal was part of a wider internal restructuring designed to mitigate regulatory problems that the US-listed, but China-focused, conditional access smart card supplier faces.
China Digital TV said yesterday that its deal with Tongda was still subject to approvals by the board of directors and shareholders of relevant parties, as well as clearances from regulators including the China Securities Regulatory Commission, the PRC Ministry of Finance and the PRC Ministry of Commerce.
“The restructuring is expected to be subject to close scrutiny by the regulators amid increasingly stringent standards for similar transactions,” it warned.
“There is no assurance that these approvals or regulatory clearance will be obtained within an expected timeframe, or at all.”
The company reaffirmed plans to scrap the restructuring if it has not been completed by the end of 2015.
Last month it posted US$17.2m in GAAP net revenues for Q2 2014, marking a 5.8% decreased compared with the corresponding period in 2013. China Digital TV blamed the fall primarily on a decrease in revenues from the sale of smart cards, although that was partially offset by a rise in revenues from other services such as licensing income.
Gross profit for Q2 2014 was US$12.6m, a decrease of 9.9% from the same period in 2013.
China Digital TV shipped roughly 3.55 million smart cards in the three months to 30 June, down slightly from 3.58 million the year before.
