LeTV Games may sell half of its equity for 750 million yuan, the shareholding structure changes greatly

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LeTV Games sold its stake in a high-priced bet against ST Huiqiu's major shareholder's funds involved. An industry M & A fund plan available to reporters shows that LeTV Games Technology (Beijing) Co., Ltd.(hereinafter referred to as LeTV Games) may be sold soon. The above fund plan mentions that the founders of the fund include Shenzhen Qianhai Ruilai Fund Management Co., Ltd.(hereinafter referred to as Ruilai Fund), joint financial institutions, major shareholders of LeTV Games, and Shenzhen Ruilai Lerui Investment Enterprise (Limited Partnership)(hereinafter referred to as Rui...

Letv's net profit in 2016 was only 20, 000 yuan, but it promised to make a profit of 60 million yuan in 2017 in the agreement on the transfer of shares.

original title: Letv game sky-high price bet to sell equity ST Huiqiu major shareholder funds involved

an industrial M & A fund plan mastered by reporters shows that Letv Game Technology (Beijing) Co., Ltd. (hereinafter referred to as Letv Games) may be sold soon. The operator behind it is related to Shenzhen Ruilai Jiayu Investment Company (Limited Partnership), which suddenly bought a stake in ST Huiqiu and became its major shareholder at the end of 2016.

as mentioned in the above fund plan, the founders of the fund include the joint financial institution of Shenzhen Qianhai Ruilai Fund Management Co., Ltd. (hereinafter referred to as Raleigh Fund), the major shareholder of Letv Games, and Shenzhen Ruilai Lerui Investment Company (Limited Partnership) (hereinafter referred to as Ruilelui). The first phase is worth 1.5 billion yuan. And Letv game major shareholder and Ruilai Lerui together as inferior LP contributed 400 million yuan.

the reporter once asked Letv for confirmation on the fund plan, but Letv said he did not know about the game public relations. Subsequently, the reporter visited the headquarters of Rongchao Building, Jintian Road, Futian District, Shenzhen City. Rilai fund staff refused further contact with reporters on the grounds that all the project team members were on business trips.

the reporter found that the major shareholder of Letv's game in this plan is not only the cube of the fund, ready to participate in the capital contribution, but also the target of being acquired. According to the fund plan, a 51 per cent stake in Letv's game will be acquired by the fund at a transaction consideration of 750 million yuan. This 51% equity comes from the shares of angel investors (47%) and other shareholders (4%).

so who are the angel investors and other shareholders in the plan? According to the current industrial and commercial data of Letv Game, the shareholding proportion of Letv Game is Wang Sheng 26.88%, Chen Jian 20.16%, Liu Yiqian 20%, Letv Investment Management (Beijing) Co., Ltd. (hereinafter referred to as Letv Investment) 21.44%. Beijing Chuangxiang Future Technology Co., Ltd. (hereinafter referred to as Creative Future), Shenzhen Ruilai Yuanze Investment Co., Ltd. (limited partnership) 4.80%.

A further examination shows that the ownership structure of Letv Game is quite different from its original ownership structure.

at the beginning of Letv's game registration in April 2015, only Wang Sheng, Yan Rong and Letv invested. In August of the same year, he wanted to buy shares in the future. In January 2016, Yan Rong withdrew and Chen Jian joined the company. In November of the same year, after Ruilai Yuance and Liu Yiqian bought shares, the ownership structure of Letv's game was formed.

A person familiar with the matter told reporters that the person who participated in the establishment of the fund and was expressed as the "major shareholder of Letv's game" in the plan was Chen Jian, the natural person shareholder who held 20.16% of Letv's shares in the game. The 51 per cent stake is most likely targeted at the stakes held by Wang Sheng, Chen Jian and Ruilai Yuanzhi. In other words, Chen Jian and Ruilai are not only the holders of the underlying assets, but also one of the transferees.

Ruilai Yuanshi bought a stake in Letv game ahead of time in November 2016, and transferred the income right of the fund as a common inferior rear in the above-mentioned fund with Chen Jianyi.

according to industrial and commercial data, Ruilai Jiayu, Ruilai Lorui and Ruilai Yuanze are all subsidiaries of Ruilai Fund. While Ruilaijia is known as the major shareholder of ST Huiqiu, it makes sense to bring ST Huiqiu into the operation plan of the fund scheme.

in addition, in the fund program, the acquisition target is not only Letv Games, but also an unnamed gold company and a smart city communications company.

as an important part of this transaction, what is the texture of Letv's game itself? The program shows that Letv game net assets of about 320 million yuan, the scale of liabilities can be "negligible." In 2016, its total income was 100 million yuan and its net profit was 20,000 yuan.

however, Letv's game, with a net profit of only 20, 000 yuan, plans to sign a bet agreement with its counterparty. In the plan, Letv promised a net profit of 60 million yuan for gambling in 2017, 120 million yuan for 2018 and 250 million yuan for 2019.

A person in the investment banking industry, who spoke on condition of anonymity, told reporters: "after raising the ST smart ball, Ruilai must want to inject assets to maintain its major shareholder status", so as to gain control of ST smart ball. From the acquisition point of view, Letv game volume is small, but the "debt ratio is very low, relatively clean."

ST Huiqiu was suspended in early January 2017 due to the inquiry incident on the Shanghai Stock Exchange, and has not resumed trading so far.

Edit: jessica