Communications technology service provider UTStarcom has announced that it has gained USD48.5 million investments from three strategic investors.
Under an agreement, Beijing E-town International Investment and Development, Ram Max Group Limited, and Shah Capital Management will invest USD48.5 million in UTStarcom, including USD25 million from BEIID, USD12.5 million from Ram Max Group Limited, and USD11 million from Shah Capital Management. UTStarcom will issue about 22 million ordinary shares at the price of USD2.2 per share in the transaction.
On the completion of the transaction, Du Baichuan, former deputy chief engineer of China's State Administration of Radio, Film and Television; Li Xiaoping, deputy general manager of BEIID; and Huang Shaoqiu, managing director of Yellowstone Capital, will enter the board of directors of UTStarcom. At the same time, the company's two directors will resign their positions.
Thomas Toy, chairman of UTStarcom, said that the company will reposition its development strategy and will reinforce its cooperation relation with the municipal government of Beijing and related organizations.
In addition, UTStarcom will relocate its headquarters to Beijing. However, it plans to maintain all existing businesses in Hangzhou and Shenzhen.
The investments are expected to be completed before March 31, 2010.