SIIS to hike stake in lottery operator
(Shanghai Daily)
Updated: 2006-07-25 09:00 Softband International
Investment (Strategic) Ltd intends to pump in HK$454 million (US$58.37 million)
to increase its stake in the Chinese mainland's lottery business, it said in a
submission to the Hong Kong Stock Exchange yesterday.
The venture capital firm plans to up its overall equity interest in the China
Gloria Consultant group of companies from 20 percent to 50 percent for the
group's businesses in Shanghai, Chongqing, Haikou, Heilongjiang Province and the
online business.
CGC is one of few legal lottery operators on the mainland with more than ten
subsidiaries and branches in Beijing, Shanghai, Wuhan, Chongqing, Guangzhou, and
the provinces of Sichuan, Heilongjiang, Hainan, and Shanxi.
SIIS said it has entered into five agreements with CGC, offering different
valuations of each local firm to represent the difference in size and potential
of the welfare lottery business in each of those markets.
In particular, SIIS will invest HK$198 million for a 50 percent stake in CGC
Heilong-jiang. The northeastern province is currently the third-largest market
in terms of total welfare lottery revenues generated in China, with revenues
amounting to 3 billion yuan (US$375 million) last year.
Following the acquisition, SIIS hopes to expand the lottery service to
include the retail sale of traditional lottery products online and over the
counter in the coming months.
"Until recently, China Gloria's focus has been solely on the new
'High-Frequency' lottery products such as Video Lottery Terminals, Keno, and
Instant Scratch," the company said in a press release.
Traditional lottery accounts for 95 percent of the market, but SIIS expects
the new products to grow rapidly and eventually take up 50 percent of the
China's welfare lottery market.
|
