omniture

DVN (HOLDINGS) LIMITED -- Entering Into a Letter of Intent to Establish a Joint Venture Company (Announcement)

2006-11-28 12:00 2685

HONG KONG, Nov.28 /Xinhua-PRNewswire/ --

DVN (HOLDINGS) LIMITED

(incorporated in Bermuda with limited liability)

(STOCK CODE: 500)

The Company is pleased to announce that on 28 September 2006, a wholly-

owed subsidiary of the Company has entered into a non-legally binding letter

of intent to establish a joint venture company to develop the digital

broadcasting business in Nanchong City in Sichuan of the PRC.

THE JOINT VENTURE

The Company is pleased to announce that on 28 September 2006, a wholly-

owed subsidiary of the Company ("DVNS") has entered into a non-legally

binding letter of intent ("LOI") with Nanchong City Broadcasting TV Network

Transmission Centre ("NCBN"), an independent third party not connected with

the Directors, chief executives or substantial shareholders of the Company

or any of its subsidiaries, or their respective associates, to establish a

joint venture company to develop the digital broadcasting business in

Nanchong City, Sichuan of the People's Republic of China ("PRC").

Pursuant to the terms of the LOI, the parties intend to establish a

joint venture ("JV") which will be owned as to 49% by DVNS and 51% by NCBN.

It is intended that NCBN will inject the relevant rights of the network,

equipment and etc. and the Group will be responsible to provide the platform

and equipment for the integration of digital broadcasting in such network.

NCBN will also be responsible to procure the JV to become the exclusive

operator to provide digital broadcasting and related services to Nanchong

City and obtain all approvals from the relevant government authorities.

Final terms of the agreement to establish the JV will be subjected to

further negotiation and the Company will make necessary disclosure according

to the Listing Rules when appropriate.

INFORMATION OF THE COMPANY

The Company is the leading provider of digital TV broadcasting systems

integrator and terminal products in the PRC. It has installed more than 40

digital broadcasting systems and its patented products have been extensively

deployed. In 2005, the Company cooperated with the Qingdao City Radio and

Television Bureau to migrate the entire city to digital, building the

first "model city" in digital broadcasting in the PRC. The Company also

scored success in shifting Foshan to digital broadcasting. In 2006, the

Company achieved further success in migrating Guangxi to fully digitalized

and making Guangxi the first "digitalization model" at the provincial

level. The Company's set-top boxes have received license from China's State

Administration of Radio Film and Television ("SARFT") and are widely adopted

in the PRC market. The Group generates its revenues from the sales of set

top boxes, broadcasting platforms, subscription fees and related services.

REASON OF FORMING THE JV

Nanchong City has a population of approximately 7,300,000 with 400,000

cable TV subscribers, and it has network coverage of at least 800,000

households in various counties, implying an ample market room for growth.

As part of the ordinary course of business of the Group, the Group always

wishes to expand its coverage and market share in different areas in China.

Pursuant to the terms of the LOI, DVNS will be compensated for its sales of

the set-top boxes to the cable operators and end-users by having a share in

the monthly subscription fee paid by the end-users. Also, the Group shall

be able to share the revenue from the value added services provided to the

end-users.

The Company will continue to develop its digital broadcasting business

in other provinces with similar business model and will seek ways to

strengthen its capital base and financial position, in order to facilitate

its rapid roll-out of TV digitalization in China.

As at the date of this announcement, the Board comprises Mr. Ko Chun

Shun, Johnson, Mr. Lui Pan, Terry, Mr. Luo Ning, Mr. Qiu Yiyong, Mr. Jin

Wei, Mr. Wang Daoyi and Mr. Hu Qinggang (each of whom is an executive

Director) and Mr. Shaw Sun Kan, Gordon, Mr. Jerry Sze, and Mr. Itzhak

Shenberg (each of whom is a non-executive Director), and Mr. Chu Hon Pong,

Mr. Liu Tsun Kie and Mr. Yap Fat Suan Henry (each of whom is an independent

non-executive Director).

By order of the Board

DVN (Holdings) Limited

Johnson Ko Chun Shun

Chairman

Hong Kong, 27 November 2006

Note: This announcement is issued as supplementary information to the

press release titled "DVN to Migrate Nanchong in Sichuan to Digital

Leveraging on Innovative Business Model to Further Expand Leadership in

China Digital TV Market" by DVN (HOLDINGS) LIMITED issued on the same day.

Source: DVN (HOLDINGS) LIMITED
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