Yangtze Telecom will acquire a 50% equity interest in Beijing Haidian Cable Television Network Information Company for CNY42, 857,000.
"We are very pleased to have reached agreements with Longxin for our investment in HDCTV. With its very experienced, capable management team and excellent fiber optic cable assets, HDCTV presents an unprecedented opportunity for Yangtze to enter this digital TV business in China, a market usually with few openings because of its high barrier to entry and tremendous growth potential, "said Emily Chen, president of Yangtze Telecom. "We are in the process of finalizing the valuation of HDCTV's assets, for which we have engaged the services of an independent third party asset valuation company in Beijing."
Established in March 2000 with a reported profitable operating history in the last two years, HDCTV apparently owns all the requisite licenses for the broadband ISP business, digital cable TV and broadcasting in Haidian district of Beijing, which is known for its concentration of universities, research institutes including Zhongguancun, the Silicon Valley area of China.
The company says it is also committed to raising additional funds for capital expenditures of approximately US$10 million in the twenty-four months after the completion of the acquisition.