Its whole 5.01 per cent interest in broadcaster Mango Excellent Media Co Ltd will be sold by an investment arm of the Chinese e-commerce giant Alibaba Group Holding Ltd, which has been targeted in a regulatory crackdown, according to the media company.
The sale comes less than a year after the company had made the investment in December of last year. In recent months, Chinese regulators have clamped down heavily on some of the largest domestic internet companies of the country including Alibaba.
Regulators had slapped a record fine of $2.75 billion on Alibaba over charges of engaging in anti competitive activities.
At the time when Alibaba had made the investment in the company, it had agreed to a lock-in period of one year, In a filing to the stock exchange on Thursday, the media business stated that Alibaba’s investment arm will seek a release from that one-year lockup period fort selling of its stock in the company.
Mango Excellent Media’s stock has dropped about 40 per cent since the time that Alibaba had made the investment. The company, located in China’s western region of Hunan, creates Internet and television content in addition to operating a retail business.
There were no comments on the issue available from Alibaba.
Since last October, when Chinese regulators unexpectedly blocked the plans of the company to issue an initial public offer for its financial subsidiary, Ant Group, Alibaba’s stock price has dropped by nearly 50 per cent.
Mango Excellent Media is one of numerous media-related ventures that are backed by Alibaba. For example, Alibaba owns a significant stake in Weibo Corp, which is China’s social media counterpart of Twitter.
Alibaba also owns the South China Morning Post, Hong Kong’s leading English language daily.
In July, there were reports that Weibo was in discussions to go private with the assistance of a Shanghai based Chinese state owned firm in order to assist Alibaba in its divestment efforts. Following the reports, the company’s chairman, Charles Chao, stated that there were no such plans of the company to go private and no such negotiations were being held. .
Aside from Weibo, Alibaba holds investments in a number of minor Chinese online media companies and has its own filmmaking business, Alibaba Pictures.
(Adapted from MoneyControl.com)