CDC Corporation (CHINA) says that independent shareholders of its subsidiary China.com have approved the internal restructuring of CDC Games which will make the online games publisher a direct business unit of CDC Corporation.
China.com Inc. is a 77%-owned subsidiary of CDC Corporation and is listed on the Growth Enterprise Market of the Hong Kong Stock Exchange. Under this restructuring plan first announced on November 17, 2006, CDC Corporation will acquire 100% of CDC Games from China.com Inc. for a purchase price of US$110 million, US$50 million of which will be paid in cash and US$60 million of which will be funded through an 18 month note bearing interest at 5% per annum. Additionally, CDC Corporation will pay up to US$25 million to China.com Inc. in the event CDC Games completes a successful listing on certain recognized stock exchanges within the next 12 months.
"We believe that this restructuring is a win-win for all parties involved," said Peter Yip, CEO of CDC Corporation and China.com Inc. "For China.com Inc., it allows the company to concentrate its resources on its established and growing MVAS and portal businesses which are tightly aligned in terms of target audiences, go-to-market strategies and infrastructure requirements. For CDC Corporation, it acquires an asset with significant potential that will benefit from its growth-oriented management style and extensive global operations and expertise."
Dr. Chen Xiaowei is currently head of both China.com and CDC Games, so it is unclear how this restructuring will impact Dr. Chen's position within the company.