Global Sources (GSOL) announced its wholly-owned subsidiary, Trade Media Holdings, will not exercise its option to increase its equity stake in HC International by an additional 171,908,134 shares.
Global Sources' Chairman and CEO Merle A. Hinrichs said, "Last June, Global Sources and HC International entered into a strategic partnership. Since then, Global Sources and HC International evaluated opportunities to work more closely together. After careful consideration, our board of directors has decided not to increase Global Sources' equity stake in HC International at the pre-determined option exercise price, nor exercise our option to purchase Huicong Construction's equity stake in Beijing Huicong. Nevertheless, we remain in a strategic relationship with HC International, and we will continue exploring cooperative opportunities."
Trade Media Holdings will also not be exercising its other option to purchase Huicong Construction Company's 18%
equity stake in Beijing Huicong International Information Company for an aggregate exercise price of HK$248,944,924. Beijing Huicong is an 82% indirect subsidiary of HC International.
Global Sources still collectively own a total of 62,652,000 HC International shares, representing an approximate 12.80% equity interest in HC International. Global Sources' Chief Operating Officer, Craig Pepples, remains a non-executive director on the board of directors of both HC International and Beijing Huicong.
Hinrichs added, "We are continuing to aggressively pursue our own B2B initiatives in China's domestic market. Today, we have over 1,700 team members in China, in 44 locations. We recently announced the scheduled launch of two China Sourcing Fairs in Shanghai in December 2007 — China Sourcing Fair: Fashion Accessories and China Sourcing Fair: Baby & Children's Products, and the scheduled launch of the Elegant Living magazine and web site in September."