NQ Mobile provides update on FL Mobile divestment
In a press release on November 23, the Company announced the current update on the FL Mobile Divestment. Following the termination of the transaction between the Company and Shenzhen Prince New Materials Co., Ltd., as announced in a press release on November 2, 2016, Dr. Vincent Wenyong Shi, chairman and chief operating officer of the Company, and Xinjiang Yinghe Equity Investment Management Limited Partnership, an affiliate of the management of FL Mobile, recently exercised their options to revert some of the transactions regarding the equity interests in FL Mobile. Dr. Shi and the Company agreed to revert the sale of 5.66% equity interest in FL Mobile. As a result of this reversal, the equity interests in FL Mobile purchased by Dr. Shi was changed to 16.34% from 22%, and the consideration was adjusted proportionately from RMB880M to RMB653.6M. Dr. Shi and the Company have the option to request the reversal of the remaining 16.34% if the FL Mobile Divestment does not consummate or fails to obtain regulatory approval from relevant government authorities and additionally, Dr. Shi may revert the transaction if the FL Mobile Divestment is not completed within two years from the date of the termination agreement. Xinjiang Yinghe and the Company agreed to revert the sale of 12% equity interests in FL Mobile. After obtaining effective control of the 5.66% equity interests in FL Mobile back from Dr. Shi and the 12% equity interest in FL Mobile back from Xinjiang Yinghe through relevant contractual arrangements, the Company now controls 63% of the equity interests in FL Mobile. In addition to the 63% of equity interests in FL Mobile controlled by the Company, the other shareholders of FL Mobile include Dr. Shi's 16.34% as announced and updated on November 23, 2016; Jinxin Hengrui's 13.13% as announced on May 6, 2016; Jinxin Haoyue's 3.53% as announced on August 9, 2016; Jinxin Huatong's 3% as announced on August 9, 2016; and Tibet Zhuohua's 1% as announced on August 9, 2016.