PacificNet (PACT.PK) will sell its entire 51% ownership in Guangzhou 3G Information Technology Company to HeySpace International Limited for US$6 million.
"This strategic sale made business sense and was in line with our new focus on gaming," said Tony Tong, CEO of PacificNet. "As we stated previously in our conference calls, PacificNet will continue to seek strategic alternatives for our legacy businesses while focusing on gaming and CRM going forward. We will continue to explore strategic sale of our legacy businesses including our other value-added service units, mobile e-commerce distribution and telecom units. This sale represents one more step in that progression and we are very happy to announce the positive terms of this sale to our shareholders as we believe this will help to improve PacificNet's balance sheet by converting goodwill into cash. Our goal is to streamline our operation, downsize the non-performing legacy operations, and simplify our business strategy with an emphasis on our new focus on gaming technology development."
The sale will be paid in cash in five installments over seven months. PacificNet acquired 51% controlling interest in Guangzhou 3G in March of 2005 for US$5.5 million consideration which was paid partially in cash and mostly in PACT stock.
HeySpace International Limited is one of the many social network services and virtual community service providers operating in China. Based in Guangzhou and Hong Kong, HeySpace says it is in the process of building one of the largest lifestyle and community destinations in China.