Tiger Media, one of China's leading nationwide multi-platform media
companies, has divested its stake in its subsidiary SearchMedia
International Limited (SMIL).
part of the transaction, SMIL will be divested to Partner Venture
Holdings Limited, an independent third party private limited company,
in exchange for 650,000 options of Tiger Media at $1.25 per share.
in the divestiture of SMIL are the subsidiaries, Ad Icon Hong Kong
Limited, Beijing Wanshuizhiyuan Advertising Co., Ltd. and Shanghai
Botang Advertising Co., Ltd subsidiaries.
part of the transaction, Partner Venture will pursue the collection
of all receivables and all claims for SMIL, for the benefit of Tiger
Media and share 50 per cent of any receivables, net proceeds, awards
or judgments from any claims or lawsuits brought about by SMIL entities;
provided, however, 100 per cent of any sale proceeds from the sale
or transfer of any of the SMIL subsidiaries will accrue to Tiger
of 31 December, SMIL's operating results will no longer form part
of the Company's consolidated financial statements. The Company
believes that the cost savings from eliminating out the remaining
earn out obligations and potential tax liabilities pursuant to the
acquisition agreement within the subsidiaries of SMIL frees up the
Company's resources for use in other more promising opportunities.
transaction also materially improves the balance sheet and capitalization
of Tiger Media including eliminating $13.7 million of goodwill,
$21.3 million of accounts payable, $5.4 million in remaining acquisition
consideration payable and $11.6 million of income tax payable.
Media CEO Peter W H Tan remarked, "It is never an easy decision
to dispose of operating subsidiaries that has been with Tiger Media
from the outset, but we feel in order to expand shareholder value
in the longer term and allow the Company to focus on and pursue
additional accretive concessions, it is in the best interests of
the Company to divest SMIL.
is, of course, beneficial as a whole to be able to eliminate from
our balance sheet outstanding payables, earnout liabilities and
tax provisions in the aggregate amount of $38.3 million. We intend
to continue to focus on more profitable concessions such as our
announced major concessions with Home Inns & Hotel Management
Inc. and our Luxury Mall LCD Joint Venture and expect to continue
to add new concessions with prominent partners that will accelerate
our growth and create value for our shareholders."