Cash-Hungry Shanda Cleans House 缺乏现金的盛大出售资产
Shanda’s aspirations to become a major entertainment company are becoming an increasingly distant memory, as the cash-strapped company embarks on a series of asset sales that look like a desperate attempt to pay down its large debt. Of course, Shanda founder Chen Tianqiao is spinning the story a bit differently, saying the sales are designed to dispose of non-core assets to let the company focus on its main entertainment business. The latest in the recent string of spin-offs has seen Shanda sell its Jisheng Technology unit, a maker of Internet cafe management software, to a company called iCafe8 (Shenzhen: 300113) for a relatively modest 80 million yuan, or about $12.7 million. (English article) That follows Shanda’s sale last month of 2 other units, online board and card game operators Bianfang and Haofang, which Shanda had purchased in 2004 for $80 million. (English article) Shanda was a superstar 8 years ago when it became China’s first online game company to make a New York IPO, giving investors an entry into China’s fast-growing online game sector. At that time, Chen detailed plans to build his company into a diversified entertainment giant, broadening beyond just online games into the gaming console and filmed entertainment business. But those plans never really went anywhere, with most of Shanda’s initiatives ending in failure or only modest success. Even the spin-off of its core online game business into a separate company, Shanda Games (Nasdaq: GAME) has been largely a failure, with the company’s stock now trading at less than half its 2009 IPO price of $12.50. Frustrated at Wall Street’s lack of appreciation of his companies, Chen last year announced a plan to take his originally listed company, Shanda Interactive, private, in a deal that reportedly cost him more than $600 million. Meantime, Chen has been anxiously awaiting a window to raise some new money with a New York public offering for his money-losing online literature unit, Shanda Cloudary. Shanda was originally set to make that offering last summer, but had to scrap the plan after market sentiment turned sharply against Chinese companies due to a series of accounting scandals. In February it relaunched the plan, saying it aimed to raise up to $200 million. (previous post) Since then, however, the only other New York IPO this year by a Chinese company, made by online discount retailer Vipshop (NYSE: VIPS), performed miserably, raising only half the amount the company was aiming for and falling sharply in its first few days of trading. This recent string of asset sales indicate that Shanda is struggling under a pile of debt from its privatization, and that it’s having trouble finding new funds from lenders and financial markets to pay off that money. If that’s the case, look for more sales from Shanda in the near future, including even possibly some of its more core assets as Chen tries to put his debt-laden company on more solid financial footing.
Bottom line: Shanda’s recent string of asset sales reflect a company struggling under a large pile of debt following its recent privatization, with more sales likely in the next few months.
Related postings 相关文章:
◙ Outlook Cloudy As Shanda Refiles for Literature IPO 盛大文学重启赴美IPO计划
◙ Shanda Delists: Thanks for the Profits 盛大网络退市：获利可喜
◙ Shanda Moves Ahead With Privatization 投资者对盛大私有化仍持保留态度
