Origo Partners’ portfolio company Fans Media has established a joint venture with SK Telecom called SK Fans.
SK Telecom is South Korea’s largest telecom service provider.
It offers an extensive portfolio of broadband and mobile value-added services and brands, including CyWorld, South Korea’s largest internet community, and CyWorld China, a social network service and blogging site.
SK Telecom’s contribution to the joint venture will be the CyWorld China business, as well as USD12m in cash, for which it will receive a 51 per cent stake.
Fans Media will contribute all of its assets, including its main internet property www.ifensi.com, for a 49 per cent interest in SK Fans.
The amalgamation of the CyWorld and Fans Media businesses, and SK Telecom’s investment, are subject to various closing conditions, including certain regulatory approvals. The transaction is expected to complete in July 2010.
Origo will maintain an indirect interest in SK Fans, through a combined preferred and common stock holding in Fans Media, equivalent to a converted interest of 14.3 per cent in the outstanding share capital of that company.
Origo chief executive Chris Rynning (pictured) says: “We have been exploring for some time various financing strategies for expanding the business model and boosting the financial strength of Fans Media. I am therefore delighted about the strategic commitment of SK Telecom, a recognised player in the region and a pioneer in the value-added telecom space. SK Telecom’s investment will ensure that Fans Media is fully-capitalised to maintain its strong position in China’s rapidly changing online media and social networking market. Furthermore, we expect that one unified management and shareholder structure will create tangible cross-group benefits for both businesses and look forward to working with SK Telecom in making SK Fans a success.”
