Sun Seven Stars Sets Up $437M Entity To Fuel Growth Of Wecast Network

Sun Seven Stars Media Group, an investment vehicle controlled by Chinese media mogul Bruno Wu, has agreed to create a RMB3 billion (US$437 million) holding company to support and invest in the future growth of Chinese content video on demand service provider Wecast Network, Inc., formerly YOU On Demand Holdings, Inc.

The holding company is set up to invest in the future growth and business expansion of Wecast Network, Inc. exclusively. It will help finance the company’s growth if needed and will buy its shares in the open market, says an announcement.

Sun Seven Stars initially invested US$10 million in the company in December 2015. A month later, Bruno Wu was elected as chairman of the company. In May, Wecast Network made a strategic investment in U.S. Internet video firm Frequency Network, Inc. to jointly launch mobile Internet customized video services.

Bruno Wu is the husband of Chinese television celebrity, talk show host Yang Lan (pictured). Sun Seven Stars is China’s largest private media and investment group, and operates a number of popular talk shows hosted by Yang Lan.

In a unique deal structure, the newly established holding company will be 67% capitalized by Sun Seven Stars and 33% capitalized by Guizhou Guibao Investment Fund, in which Sun Seven Stars holds a 10% limited partner stake.

Wecast Network is not a party to the holding company, and will not contribute to the capitalization.

Sun Seven Stars will inject its current and future shareholdings of Wecast Network into the holding company. It’s unclear how many shares Sun Seven Stars holds currently.

The holding company will also be funded with RMB1 billion (US$146 million) in three phases: RMB300 million (US$44 million) by the end of 2016, RMB400 million (US$58 million) estimated by March 1, 2017, and RMB300 million (US$44 million) estimated by August, 2017.

NASDAQ-listed Wecast Network is amid a transition leveraging its current content video on demand service to evolve into a global vertical mobile-driven consumer management platform for both enterprises and consumers.