Agreement to Develop Wireless Network in Beijing
Melbourne, Jan 21, 2016 AEST (ABN Newswire) - Wonhe Multimedia Commerce Ltd (
ASX:WMC) is pleased to announce that its group operating subsidiary Shenzhen Wonhe Technology Co., Ltd. ("Shenzhen Wonhe"), has entered into an agreement titled "Wireless Network Coverage Project in Beijing Area" with Guangdong Kesheng Enterprise Co., Ltd. ("Guangdong Kesheng"). The agreement contemplates that the two parties will work together to develop a wireless network in certain designated areas of Beijing. The commercial purpose of the network will be to serve as a vehicle for advertising and marketing, with the revenue to be shared between Shenzhen Wonhe and Guangdong Kesheng.
Shenzhen Wonhe has committed in the agreement to provide 382,990,000 RMB (USD $58.25 million) to the project, including 226,010,000 RMB (USD $34.37 million) in cash and 118,980,000 RMB (USD $18.09 million) in routers and other equipment. Shenzhen Wonhe will also contribute the network that it recently developed in the Tongzhou District of Beijing as a pilot project, at a cost of 38,000,000 RMB (USD $5.78 million). Shenzhen Wonhe's cash contribution will be paid over three years: 104,498,990 RMB in 2016, 84,636,558 RMB in 2017 and 36,871,412 RMB in 2018.
Shenzhen Wonhe has also committed to develop the data systems that will be used by the network.
Guangdong Kesheng has committed to supervise the engineering and construction, coordinate relationships with local government, and manage the network's operations.
Guangdong Kesheng has guaranteed a minimum of eight years of operations by the network.
Guangdong Kesheng has also guaranteed six years of fixed amount payments to Shenzhen Wonhe as follows:
RMB USD2017 10,000,000 $ 1,520.8432018 60,000,000 $ 9,125,0582019 135,000,000 $ 20,531,3832020 223,000,000 $ 33,914,8022021 246,000,000 $ 37,412,7422022 285,000,000 $ 43,344,030
During any subsequent years in which the network remains profitable, twenty percent of the profits will be paid to Shenzhen Wonhe.
About Wonhe Multimedia Commerce Ltd
WONHE Technology was founded in November 2010 and its main products are domestic and commercial routers, a home media center and related systems and management platforms. WONHE Technology's commercial routers generate Wi-Fi hotspots, which can be used to market goods and services to consumers visiting physical stores, while its Home Media Centre stream television over the internet, provide a video-on-demand service and game console and the domestic routers are "intelligent" routers with an independent operating system.
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