VisionChina Terminates Deal Selling Equity Stake In Subway Mobile TV Ad Unit

(RTTNews) - VisionChina Media Inc. (VISN) said that it has reached an agreement with Ledman Optoelectronic Co., Ltd. to terminate the equity transfer agreement relating to 49% equity interest in VisionChina New Culture Media Co., Ltd., a company that operates mobile TV advertising business on subway. The termination was due to the parties' disagreement over the operating management philosophy for New Culture.

As per to the Equity Transfer Agreement, the Company previously received transaction proceeds of RMB61.0 million in cash and RMB321.2 million in the form of 17,085,100 shares of Ledman, valued at RMB18.8 per share and representing 4.88% of total outstanding shares of Ledman.

As per the Termination Agreement, the Company will regain the 49% equity interest in New Culture from Ledman. In return, the Company will repay Ledman the RMB61.0 million cash consideration, with interest equivalent to that earned in a bank deposit for the same duration, in three installments, with the last installment to be made by August 31, 2017.

In addition, the company will repay RMB321.2 million in cash over the next three years by selling the 17.09 million shares of Ledman, which have been pledged as collateral for the Company's obligations under the Termination Agreement. If the cash proceeds of selling shares exceed RMB321.2 million, the Company shall share 50% of the exceeding amount with Ledman.

The Company is actively seeking potential purchasers of such equity interest. The Company is also exploring other ways to improve its liquidity position.