11th Sep 2015 08:09
LONDON (Alliance News) - Chinese lottery operator DJI Holdings PLC Friday said it has entered into a joint venture with Heilongjiang Sports Bureau in order to provide funding and support services to HSB's commercial activities, as DJI also appointed a new finance chief and chairman while conducting a share placing to fund the new Chinese venture.
Heilongjiang Sports Bureau operates all sports lottery activities in the north-eastern province of Heilongjiang and owns a portfolio of sporting venues and facilities.
DJI said that the joint venture will include a business-to-business online booking system for sports, which is expected to generate significant incremental revenue and for which it has already agreed terms with three of China's largest online portals to sell and promote the system. A full e-commerce platform is expected in 2016, DJI said.
Following the establishment of the joint venture company, DJI will own 40%, while HSB will own 60%. DJI will provide funding of GBP2 million in cash and HSB will provide GBP3 million in the form of cash and key contracts.
DJI added that it will place 16 million shares at 35 pence each to raise proceeds of GBP5.6 million, which will be used to fund the joint venture and for working capital purposes.
"This exciting and important joint venture is further evidence of DJI executing the strategy outlined at the time of our IPO. We are partnering with key provinces in China, increasing our channels to market and developing complementary revenue streams beyond lottery sales. Our deal with Heilongjiang Sports Bureau is testament to the strength of our relationships in China, the scale, robustness and versatility of our technology platform and our ability and commitment to introduce innovative lottery games and sports related content and services. These are key components of our strategy to further increase DJI's competitive advantage in the marketplace," Chief Executive Darren Mercer said in a statement.
"The March 2015 temporary suspension of online sales continues pending regulatory changes. During this time DJI is repositioning itself in readiness for the significant revenue opportunities that a better regulated Chinese lottery sector will bring next year for high quality operators. In the meantime, we expect the new HSB joint venture to contribute significantly to revenue before the end of 2015. The expected continued online market penetration, followed by the roll out of the e-commerce platform, again supported by our agreements with major online portals, provides a sound basis for considerable revenue enhancement in 2016," he added.
DJI added that it has recruited Steven Prowse to lead the company's finance function, following the departure of Rodney Davis. Prowse has worked as a finance director and deputy CFO at both Party Gaming and bwin.com, now part of Bwin.party Digital Entertainment PLC.
Non-Executive Chairman Simon Prior-Palmer is also stepping from his role, to be replaced by Lord Benjamin Mancroft.
"I would like to thank Rodney and Simon for their valuable contributions to seeing the company through to IPO and beyond. I am excited to be working with Steven and believe that his very strong gaming background will be of huge value to the company as it enters its next phase of growth and development. I also feel that Lord Mancroft's relevant lottery background, together with his experience in Chinese provincial government circles, make him the ideal candidate to chair the Board at this time," Mercer said.
Shares in DJI were trading down 1.8% at 40.20 pence Friday morning.
By Karolina Kaminska; [email protected] @KarolinaAllNews
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