NEXTNATION Proposed Acquisition of a Subsidiary for Business Expansion in the People's Republic of China
16 April 2006
Kuala Lumpur (PRWEB) April 14, 2006 -- Nextnation Communication Berhad («Nextnation») had on 12 April 2006 entered into a Heads of Agreement with Beijing Himo Tech Co., Ltd, and Jumpstart Investments Limited to acquire Often Reach Investments Limited in respect of the company's investment in relation to the research, development and the provision of mobile communication, wireless technologies, wireless value added services, Internet and related software and business ancillary thereto («Subject Activities») in the People's Republic of China (PRC).
Nextnation and its subsidiaries has a 50% shareholding in the enlarged issued and paid-up ordinary share capital of Often Reach and the Board of Directors of Often Reach will comprise of four (4) representatives of Nextnation (or its affiliate) and three (3) representatives of Jumpstart, where Nextnation will control the board.
Often Reach will establish a wholly-owned foreign entity («WOFE») in the PRC to undertake the Subject Activities. The Board of Directors of WOFE will consist of four (4) representatives of Nextnation (or its affiliate) and three (3) representatives of Jumpstart, where Nextnation will control the board.
Upon the establishment of WOFE, WOFE and Beijing Himo shall execute agreements which include Exclusive Business Cooperation and Operating Agreement in relation to research, development and provision of mobile platform, contents and applications; Exclusive Technical Consulting Service Agreement whereby WOFE will be the exclusive technical and consulting service provider in relation to network and web development, maintenance, research and development and consulting services on sales, marketing, customer services, human resources, corporate exercises, market research and public relations. WOFE shall be the sole owner of all the copyrights of the software developed by WOFE and/or jointly by WOFE and Beijing Himo. In consideration for the services provided by WOFE, Beijing Himo shall pay WOFE a fee of USD1,000,000 (equivalent to approximately RM3,700,000 based on the exchange rate of USD1.00 : RM3.70) per annum; and such other agreements to be agreed between WOFE and Beijing Himo to enable WOFE to have a substantial influence on Beijing Himo's daily operations and financial affairs.
As of April 2006, Nextnation messaging platform covers 30 mobile operators worldwide across Asia, Europe and North American. South East Asian operators includes Singtel, MobileOne and StarHub in Singapore; Maxis, Celcom and DiGi in Malaysia; Telkomsel, IM3, Satelindo and Excelcom in Indonesia and AIS, DTAC in Thailand.
Impact on Nextnation
The acquisition will enable Nextnation to penetrate the fast-growing wireless value-added services market and the related industry in China, and this is in line with the Nextnation overseas market expansion strategies to diversify and grow its revenue base. The Board of Nextnation believes the Chinese market offers Nextnation significant expansion potential.
Market for advanced entertainment content services is expected to be the largest growth segment, increasing from $291 million in 2005 to over $450 million and $650 million in 2006 and 2007 respectively. Recent estimates suggest that less than 25% of mobile handsets in China can access premium content. However, this is set to grow rapidly as such phones now account for the majority of handset sales in China. Nextnation be well placed to build upon its leading position in the market.
«Beijing Himo is one of the most talented, technically-advanced and successful nationwide service provided (SP) in China. We are very pleased to have them on our team.» said P.Y Tey, CEO of Nextnation. «China is the world's largest mobile telecommunications market with approximately 400 million mobile phone users. The number of users is expected to increase to 570 million in 2008. The revenue generated by wireless value added content providers is forecast to increase to $1.9 billion by 2008. As a global leader in wireless value added service provider, Nextnation is ideally positioned to capitalize upon this growth trend.»
About Nextnation
Nextnation, a mobile application service provider, enables businesses and individuals to access, connect, and transact across today's complex global mobile networks. Its core product MINDCEP™ Platform is a mobile multimedia communication platform, facilitating and enabling mobile data transmission worldwide using WAP, MMS, SMS and Java technologies.
MINDCEP™ is connected to some of the largest premium messaging networks in the world in order to offer a broad range of services from content distribution to mobile m-commerce and place the company at the forefront of this rapidly growing messaging market. Additional news and information about the company is available at www.nextnationnet.com.
About Beijing Himo
Beijing Himo is a company established in the PRC and is involved in the provision of telecommunication and wireless value added services in the PRC. Beijing Himo provides its services via telecommunication companies in the PRC («PRC Telcos») such as China Mobile Communication Corporation, China Unicom Ltd, China Telecom Corporation Limited and China Netcom Communication Group Corporation.
Beijing Himo is one of the few service providers in the PRC which was granted the national operation permit to operate mobile value added services, and has been granted three (3) years of tax exemption and subsequent three (3) years of fifty percent (50%) tax exemption.
Press Contact:
Nextnation Communication
Ms. Sally Peh
Phone: +603.7660.5510
Fax: +603.7660.5525
Source: prweb
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