Chinese Due Diligence: Focus Media Style
Yesterday's postal service i time again raised this disclosure from Focus Media:
The cardinal words hither are "relieve a temporary shortage of Renminbi the grouping experienced".
Approximately 2 months prior at that spot was a capital raise which raised $295 million. Of that $62 1000000 went to the companionship as well as $220 1000000 went to selling shareholders. The remaining $13 1000000 went to the underwriters.*
Influenza A virus subtype H5N1 looming "shortage of Renmimbi" looks similar cloth information that should live on disclosed inward a prospectus.
Well it wasn't. Indeed the prospectus made clear that the companionship had enough of Renmimbi liquidity simply mightiness live on brusk USA dollar liquidity to pay dividends of the like.
Without a ameliorate explanation (which I cause got sought) I would intend at that spot may live on cloth non-disclosure.
So who were the selling shareholders?
It is interesting to me when $220 1000000 inward stock is maybe sold on cloth non-disclosures. I desire to know who the sellers were.
One of the biggest (but non the biggest) selling shareholder was JJ Media Investment Holdings - the vehicle of Jason Jiang, CEO/Controller of Focus Media.
Most of the other selling shareholders were prior shareholders of Target Media which was sold to Focus Media generally for stock. Those sellers were non insiders as well as thus they can't live on held responsible for cloth non-disclosure inward the prospectus. Nonetheless it is amusing selling shareholders included both Carlyle as well as CDH who are straightaway wanting to accept Focus Media private.
One final selling shareholder amuses me. It is Neil Nanpeng Shen. He is ameliorate known every bit the managing partner of Sequoia Capital China - simply inward this context he should live on known every bit the Chairman of the Audit Committee for Focus Media.
Is it possible that the Managing Partner of Sequoia Capital China sold personal shares inward a companionship inward which he was the chair of the audit commission as well as where the prospectus may cause got contained cloth non-disclosures?
I am certain at that spot must live on an choice explanation - as well as I cause got written to Focus Media to inquire them to explicate the rootage of the Renminbi shortage disclosed above. I cause got received no reply. I am hoping for i presently as well as I volition release it when received.
The underwriting fee
The underwriting fee was almost $13 million. The Pb banker was Goldman Sachs. But y'all knew that anyway.
John
*All amounts rounded to the nearest million.
In March 2006, Weiqiang Jiang, the begetter of Jason Nanchun Jiang (the CEO/controller of Focus Media), provided a short-term loan to the Group of roughly $2.5 1000000 to salve a temporary shortage of Renminbi the Group experienced at that time. The loan is unsecured as well as was provided to us at no interest. The loan volition boot the bucket due as well as payable inward total on June 30, 2006.
The cardinal words hither are "relieve a temporary shortage of Renminbi the grouping experienced".
Approximately 2 months prior at that spot was a capital raise which raised $295 million. Of that $62 1000000 went to the companionship as well as $220 1000000 went to selling shareholders. The remaining $13 1000000 went to the underwriters.*
Influenza A virus subtype H5N1 looming "shortage of Renmimbi" looks similar cloth information that should live on disclosed inward a prospectus.
Well it wasn't. Indeed the prospectus made clear that the companionship had enough of Renmimbi liquidity simply mightiness live on brusk USA dollar liquidity to pay dividends of the like.
Without a ameliorate explanation (which I cause got sought) I would intend at that spot may live on cloth non-disclosure.
So who were the selling shareholders?
It is interesting to me when $220 1000000 inward stock is maybe sold on cloth non-disclosures. I desire to know who the sellers were.
One of the biggest (but non the biggest) selling shareholder was JJ Media Investment Holdings - the vehicle of Jason Jiang, CEO/Controller of Focus Media.
Most of the other selling shareholders were prior shareholders of Target Media which was sold to Focus Media generally for stock. Those sellers were non insiders as well as thus they can't live on held responsible for cloth non-disclosure inward the prospectus. Nonetheless it is amusing selling shareholders included both Carlyle as well as CDH who are straightaway wanting to accept Focus Media private.
One final selling shareholder amuses me. It is Neil Nanpeng Shen. He is ameliorate known every bit the managing partner of Sequoia Capital China - simply inward this context he should live on known every bit the Chairman of the Audit Committee for Focus Media.
Is it possible that the Managing Partner of Sequoia Capital China sold personal shares inward a companionship inward which he was the chair of the audit commission as well as where the prospectus may cause got contained cloth non-disclosures?
I am certain at that spot must live on an choice explanation - as well as I cause got written to Focus Media to inquire them to explicate the rootage of the Renminbi shortage disclosed above. I cause got received no reply. I am hoping for i presently as well as I volition release it when received.
The underwriting fee
The underwriting fee was almost $13 million. The Pb banker was Goldman Sachs. But y'all knew that anyway.
John
*All amounts rounded to the nearest million.
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