Sun Media Acquires Stakes in FRD Holdings and China Sports Media, Requests Name to be Changed to Sun Sports Media Group Ltd.
Corporate Restructuring Effectively Completed
HONG KONG, May 24 /Xinhua-PRNewswire/ -- Sun Media Group Holdings Ltd. ("Sun Media") announced on May 21 in Hong Kong that it has signed a legally binding memorandum to purchase 60% of FRD Holdings Inc. ("FRD") for HK$50 million, along with an agreement to purchase 100% of China Sports Media Ltd. ("China Sports") for HK$42 million. They also announced that they would submit a request to the General Meeting of Shareholders to approve their proposed name change to Sun Sports Media Group Ltd.
As part of the agreements, FRD and China Sports have to make guaranteed profits of HK$18 million and HK$20 million, respectively, within a two-year period. The Organizing Committee of F1 Shanghai Run further forecasted that the advertising revenue, resulting from FRD's participation in China's F1 Shanghai Run, would exceed RMB200-300 million in the coming two or three years. All these will contribute to the potential for China Sports to increase future profits. As Executive Vice Chairman of the F1 Shanghai Run Commission, FRD will join in efforts to host the first race in the China Auto Field Tournament on June 6 with other Asian and domestic event organizers and market promoters, with some of F1's best known faces such as Michael Schumacher expected to take part in the event. Also, China Sports, through its Agreement on Profit Sharing Based on Bottom Profit Guaranteed with the Shanghai Circuit will act as an agent for a number of large-scale activities and advertisements, such as F1 Baby, which are related to the China Run of Global F1 Grand Prix and China Auto Field Tournament. In addition, they will also gain the right to sell tickets abroad.
From looking at the world's three largest sporting events, namely, F1, the World Cup (football) and the Olympic Games, advertisement revenues for F1 rank top, thanks to more than 70 thousand TV stations in 206 countries broadcasting the F1 events, and 65.7 billion people from around the world tuning in each year. After Shanghai won the right to hold the grand prix, the racing car has not only become a nation wide focus over night, but has also attracted the attention of several advertising sponsors.
Over the last few months, through corporate restructuring, Sun Media has successfully dropped its satellite TV and newspaper businesses, which suffered serious losses, and has made its current TV production and education operations profitable. Management and primary shareholders all agree that they should extend operational focus' to sports advertisement agents and new businesses related to large-scale sporting events while maintaining their present operations and services by fully utilizing the opportunities of foreign capitals allowed to act as agents of domestic advertisements and large activities. The reconstruction of this new business will make it possible for the company to gain profits and greater shareholder value.
About Sun Media:
Sun Media Group Holdings Ltd. is a media investment company wholly owned by Yang Lan, a renowned TV presenter in mainland China, and her husband. Committed to carrying forward traditional Chinese culture and promoting the prosperity of Chinese media, this company engages in various media investments in the greater China region. Thus far, it holds shares in 11 media enterprises (including 5 listed and 6 non-listed companies). It has invested in TV production, Chinese language cable and satellite channels in mainland China, Hong Kong, Taiwan, Southeast Asia, Australia and North America, ad agencies, web sites, magazines and newspaper publications, music and multi- media education etc.
For more information, please contact: Yang Haibin of Sun Media Group Holdings Ltd. Tel: +86-21-6466-7277 ext. 331 Mobile: +86-1381-668-5257 Fax: +86-21-6467-7698 Email: haibin.yang@chinasunmedia.com Web: http://www.chinasunmedia.com/