Hong Kong-based wireless investment company Neo Telemedia has signed a purchase agreement to acquire all of Hughes Network Systems’ Chinese satellite broadband assets for approximately HK$273m (US$35.2m).
Under the terms of the proposed transaction,…
Hong Kong-based wireless investment company Neo Telemedia has signed a purchase agreement to acquire all of Hughes Network Systems’ Chinese satellite broadband assets for approximately HK$273m (US$35.2m).
Under the terms of the proposed transaction, Neo Telemedia will pay HK$27.32m (US$3.52m) in cash, HK$85.68m (US$11.1m) through the issuance of 119 million new Neo Telemedia shares at HK$0.72 per share, and the remaining HK$160m (US$20.6m) through the issuance of a convertible note.
If approved by the shareholders of both parties, the acquisition would see Neo Telemedia acquire substantially all the assets held by Hughes’ British Virgin Islands registered investment company Hughes China Holdings (HCH) Investments.
These assets comprise 100% of Hughes HK, which is authorised to offer satcoms and satellite broadband services in the Greater China Region; 100% of HughesNet WFOE, a broadband satellite services provider; 100% of Beijing China Satcom, a Chinese VSAT provider; 45% of Hughes UnifiedNet, which like Hughes HK has exclusive authorisations to operate satellite broadband communication services in China; and 33% of China Orient Space Communications (COSC), an investment holding company that is currently in negotiations with an unnamed satellite operator to build, launch and operate a Ka-band satellite covering China.
The remaining 55% of Hughes UnifiedNet is owned by China UnifiedNET Holdings which is in turn a subsidiary of Singapore-based satellite communications solutions provider Next-Generation Satellite Communications. Neo Telemedia has already signed a LOI to potentially acquire this stake.
As for the outstanding 67% of COSC, this is held by a company called China Orient Telecom Satellite (Holdings) Limited.
SatelliteFinance reported back in November 2012 that Neo Telemedia had signed letters of intent to potentially acquire both Hughes’ Chinese assets and China UnifiedNET Holdings and had a 90 day exclusivity period to carry out due diligence and negotiate terms.
Incorporated in the Cayman Islands in 2002 and currently listed on the Growth Enterprise Market (GEM) of the Hong Kong Stock Exchange, Neo Telemedia states that its major areas of investment are cable, wireless and satellite broadband internet services as well as electronic media services in the Chinese mainland market.
