Li's investment plans boost Global Digital
The share price of Growth Enterprise Market-listed Global Digital Creations Holdings jumped 37 per cent to 35 HK cents yesterday after it said Li Ka-shing will take minority stakes in the loss-making digital content producer and its unprofitable subsidiary, GDC Technology, a provider of digital cinema systems.
Mr Li's investment will help finance the introduction of digital cinema equipment in movie theatres across China, the company and its parent, Shougang Concord Grand (Group), said in an announcement yesterday.
Under an agreement made on December 1, Mr Li will buy 52.38 million GDC Technology new shares, representing 32.49 per cent of its enlarged share capital, for HK$50.6 million.
That will reduce Global Digital's stake in the unit to 56.25 per cent from 83.34 per cent.
Mr Li will also buy 40 million Global Digital shares, representing 4.75 per cent of its enlarged share capital, for HK$9.74 million from Shougang Concord, a main-board property, media and financial services firm in which he already has an indirect 11.7 per cent stake.
After the deal, Shougang Concord's interest in Global Digital will drop to 71.41 per cent from 74.98 per cent.
Proceeds from Mr Li's investments will finance the joint project between GDC Technology and the Institute of Digital Media Technology (Shenzhen), another Global Digital subsidiary, to install 700 digital cinema systems in 100 mainland theatres next year, and at least 2,000 units in 2008, the announcement said.
'There has been a significant increase in the number of digital cinemas around the world. Such a trend will bring ample business opportunities to GDC Technology,' it said.
Global Digital posted a net loss of HK$18.8 million in the first half and HK$76.36 million last year, while GDC Technology reported losses of HK$4.99 million in the six months to June and HK$10.57 million last year.
Shougang Concord shares rose 5.63 per cent to 37.5 HK cents yesterday. Trading in the stock and Global Digital units was suspended on Monday.