Guangzhou to Acquire 60% of Lihe Deal to Create Prepaid Joint Venture

Guangzhou has signed a joint venture agreement with Beijing Lihe Jiahua Technology and Trading Company. Guangzhou, a mobile phone handset and prepaid calling card distributor, and mobile handset value-added services provider in the PRC, said that the company has set up a retail branch in Beijing. The Beijing branch will offer wireless products and value-added technology services. As part of the deal, Guangzhou will also acquire 60% of Lihe for RMB1.5 million. Lihe’s un-audited revenue in 2006 is around 50 million RMB with 4 million RMB of gross profit.

Lihe is a local Beijing company that is the agent of China Unicom in addition to several companies who provide internet games. Lihe is also intends to cooperate with Net Telecom and China Mobile.

Beijing, as host city of the Olympic Games in 2008, is the political center of China. It has advantages in both economics and travel, with a population of 17 million, 5.1 million of which is floating. According to statistics, the coverage of mobile users in Beijing was over 100% last year.

Ms. Li Yankuan, the CEO of the Company, stated, “The setup of the Beijing branch is a crucial step in the integration of our business throughout China. As the capital of China, Beijing is the most developed city in Northern China. Accordingly, we have targeted the city as the most significant place for us to expand our business.”


Source:
http://www.prepaid-press.com/news_detail.php?t=paper&id=1996