ChinaCache to sell data centre business for ¥221.2 million
Tue 7 Mar 2017
Chinese CDN and cloud services provider ChinaCache International has announced its plans to sell 79% of its data centre business Xin Run Technology for a total of ¥221.2 million (approx. £26 million) in cash before fees and expenses.
The Beijing-based company confirmed that the data centre assets would be bought by a consortium of Chinese investment and technology firms, including Tianjin Shuishan Technology (47.67%), Shanghai Qiaoyong Equity Investment Fund (26.33%) and Tianjin Dingsheng Zhida Technology (5.0%).
As of September last year, Xin Run had a shareholders’ equity value of approximately ¥14.8 million and a registered capital of around ¥126.6 million. ChinaCache said in a statement that it plans to channel the proceeds from the transaction into R&D, working capital, and other projects.
‘This transaction will significantly strengthen our balance sheet. In addition, by divesting the majority interest in this capital intensive business, we can focus on our asset-light and technology-driven CDN business,’ said ChinaCache chairman and CEO Song Wang, who also controls Tianjin Shuishan and Tianjin Dingsheng.
He added: ‘We believe the transaction will enable Xin Run to achieve growth and unlock value, which may further benefit our shareholders. After the transaction, ChinaCache and Xin Run may explore partnership opportunities to provide our enterprise customers with premium total solutions.’
Tianjin Shuishan, as the largest stakeholder, will loan money from Shanghai Qiaoyong or its affiliates to finance the acquisition.
The completion of the deal remains subject to customary closing conditions, including obtaining the relevant governmental registrations.
ChinaCache offers services and solutions for a variety of enterprise and government customers, including web page content, file transfers, rich media streaming and app services such as online booking and ordering, real-time stock quotes, and digital surveys.
The company further provides managed internet data services for content and application delivery, network infrastructure and security, cloud computing and network storage, content bridging services for mobile carriers, as well as mobile internet solutions.