South Africa's Naspers to hold 9.9 percent of Beijing Media

Beijing Media Corp Ltd, the first state-controlled Chinese media firm to seek an overseas listing, said on Sunday South Africa's Naspers Ltd would hold 9.9 percent of the firm after its $116 million IPO. Naspers, South Africa's biggest media company whose stable includes newspapers, magazines, pay-TV services and a host of Internet portals, said last month it hoped to expand its interests in Asia.
"We like its multimedia experience, therefore we pick it as our corporate investor," Du Min, executive vice president of Beijing Media, told reporters at a news conference.
A source close to the Beijing Media initial public offering (IPO) had previously told Reuters that the firm, the advertising sales unit of Beijing's number-two newspaper, had sought a Hong Kong listing in the hope of securing an international partner.
Beijing Media plans to raise up to HK$905 million ($116 million) in its IPO through the sale of 47.74 million H shares, or 25 percent of its enlarged equity, at HK$14.95-18.95 each.
The firm plans to use HK$250 million or 30 percent of the IPO proceeds, to invest in the television industry, while the rest would be spent on acquisitions of other media and start-ups of a weekend newspaper and magazines.
Of the 12 TV channels in Beijing, only two or three are profitable. But Beijing Media expects its TV business to break even in the second and the third year of operation.
"We expect our net profit margin to remain above 10 percent after branching into TV business," said Lau Wing Kee, chief financial officer of Beijing Media.
Growth in China's advertising market, the world's seventh largest, has exceeded 20 percent per year for the past 10 years, with newspapers accounting for about 36 percent and TV 43 percent for the past five years.
Because of domestic regulations, the editorial and distribution operations of Beijing Youth Daily are separated from the listing firm.
Beijing Media collects fees from advertising agents, then pays a 16.5 percent share of that to its parent. Sun Wei, president of Beijing Media, said the 16.5 percent share is likely to remain stable for the next 30 years.
Naspers, which would hold the stake through its MIH unit, generates around 64 percent of its revenue in South Africa and also operates in Greece, Cyprus, the Netherlands, China and Thailand, according to its Web site (www.naspers.com).
MIH plans to buy 39.6 percent of Beijing Media's initial public offering, with a six-month lock-up period.
About 90 percent of the offering will go to institutional investors while the rest will go to retail investors.
The stock is expected to debut on December 22, under the stock code.