Sale of minority interest in Bejing Nation Sky Network Tech

[admin]

NQ Mobile Inc. Announces Sale of a Minority Interest Investment in Its Wholly Owned Enterprise Subsidiary, NationSky

BEIJING and DALLAS, June 10, 2014 /PRNewswire/ -- NQ Mobile Inc. ("NQ Mobile" or the "Company" (NYSE: NQ), a leading global provider of mobile Internet services, today announced that it has entered into a definitive agreement to sell a minority interest in its wholly owned subsidiary, Beijing NationSky Network Technology, Inc. ("NationSky".

Specifically, NQ Mobile has signed a definitive agreement to sell 3.40% of NationSky for $18 million, at a pre-money valuation of $500 million or post-money valuation of $530 million, to Beijing Guorun Qilian Venture Capital Center (LP).  In addition, NQ Mobile intends to sell up to 2.30% of NationSky for $12 million to other investors within the next two months.  The funds will be used for research and development, marketing, working capital activities and the expansion of NationSky's core operations.  The investors have a right to demand the redemption of their shares if NationSky does not complete a qualified initial public offering, or find a third party buyer to acquire all or part of its shares for a valuation of at least $550 million for NationSky's business within 24 months after the investment is completed.

"NationSky is one of a significant number of exciting and fast-growing businesses and assets that make our overall company unique and attractive," said Dr. Henry Lin, co-Founder and co-CEO of NQ Mobile. "We are excited about this investment by Beijing Guorun Qilian Venture Capital Center and believe that NationSky will continue to be a leader in the enterprise mobility market in China."

"We are excited about the opportunity to invest in NQ Mobile's wholly owned subsidiary, NationSky," said Mr. Wang Pengwei, Founding Partner of Beijing Guorun Qilian Venture Capital Center.  "We believe that the enterprise mobility segment is important as more and more companies need help to maximize the productivity of their workforce and safety of their corporate data on the mobile Internet, and NationSky has a proven track record in the enterprise mobility market."

[js253]

that's $15/share between just FL Mobile and Nationsky.

[Moondog]

Selling off the company cheaply. This is BS in my opinion. They need to reveal the audit and stop messing around.

[Mountainbiker]

Now we have a floor on NQ's valuation, $15 minimum. Nice....after the 20F, we go to $15 at the blink of an eye...lol

[Mountainbiker]

Selling off the company cheaply. This is BS in my opinion. They need to reveal the audit and stop messing around.

A better investment now before the audit comes out.

[Moondog]

Management are making bad choices here. They are selling parts of the company during a period of low valuation due to the effect of short selling conspiracy.

Why do they need the money? They've got bundles of dough in the bank apparently from accessing the capital markets already.

This deal smells to me and from a shareholder perspective is bad since at best it undersells us, and worst it is an attempt to give confidence before a bad audit review.

[cliu89]

I think the strategy for the company to buy time until 20-F comes out.

[js253]

Management are making bad choices here. They are selling parts of the company during a period of low valuation due to the effect of short selling conspiracy. Why do they need the money? They've got bundles of dough in the bank apparently from accessing the capital markets already. This deal smells to me and from a shareholder perspective is bad since at best it undersells us, and worst it is an attempt to give confidence before a bad audit review.

NQ is selling small pieces of subs at full valuation. The parent company NQ is undervalued, but NQ isn't issuing stock, so the "undersell" argument is wrong.

[harry2013]

Totally disagree Moondog. This is about proving the value of the company to a sceptical market which has severely discounted true value in the midst of fraud allegations.

Net cash (c. $2) + FL Mobile (c. $8) + Nationsky (c. $9) shows proven value today as c. $19 excluding the value of the mobile securities business.

This is not about needing the cash, or selling the company off cheaply. Its about management making efforts to get the market to recognise true valuation validated by independent third party investors in order to close that discount.

[Moondog]

Absolutely no need to do this before audit release if the audit is OK. This tells me that the audit is less than perfect and that they have known this for some time whilst they have negotiated the deal.

Take the blinkers off, management have made a mess of things continually since they were attacked by Muddy.