During a Jan. 9 press conference, Neo Telemedia CEO Fred Zhang said the acquisition should contribute to the company’s net profits and cash flows by the end of this year.

“Our satellite communication services revenue would contribute more than 50 percent of our total income,” said Zhang. “The acquisition represents the company’s first step to venture into the mainland telecommunication industry by obtaining the HCH Investments’ satellite telecommunication license on the mainland and the satellite communication technology developed by HCH Investments.”

   Neo Telemedia will pay the purchase price in three segments: cash in the amount of $27.32 million; allotment and issuance of 119 million consideration shares at $0.72 each at an aggregate value of $85.68 million; and a convertible note issuance in the principal amount of $160 million. HCH Investments can choose to convert the note into Neo Telemedia shares at the conversion price of $2.5 per conversion share within a three-year period.

   Zhang estimated that the HCH investment can obtain an approximately 7.29 percent of the total enlarged capital if it chooses to convert all the conversion shares and after getting all the consideration shares. The company also did not rule out seeking additional financing in order to build and launch new satellites.