Giant Playtika Reorganization Received Feedback from the Securities Regulatory Commission

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 Giant Playtika Reorganization Received Feedback from the Securities Regulatory Commission


Giant Internet Bulletin shows that it has received the CSRC Administrative Licensing Project Review Feedback Notice. On December 18, 2018, the Securities Regulatory Commission accepted the application of Giant Online Share Issuance for asset purchase. After the audit, the feedback was put forward.

In this feedback, the SFC raised concerns about specific measures to keep Playtika online game business operating outside the mainland, and whether listed companies have plans to develop, issue or operate such online games in China in the future.

Previous application documents show that listed companies have issued a letter of commitment, promising: After the completion of this transaction, Playtikas online game business will continue to operate outside the mainland of China, the company will not introduce Playtikas online game business into mainland China.

Feedback from the SFC pointed out: Please make supplementary disclosure to your company: 1) Listed companies maintain specific ways and measures to operate Playtikas online game business outside the mainland, fully demonstrating its operability. 2) Whether listed companies have plans to develop, issue or operate such online games in China in the future, whether they comply with the policies and regulations of the competent industry authorities, and whether they need to implement the appropriate approval procedures.

The feedback also refers to the details of performance commitment: Please make a supplementary disclosure of whether Chongqing Dizhi and Shanghai Junji have actual control over Alpha in the light of Alphas ownership structure, corporate governance structure and the process of making relevant business decisions; if so, further disclose that Chongqing Dizhi and Shanghai Junji are only responsible for the shares they acquired in this transaction. Whether performance commitment and compensation obligations, the specific reasons and rationality of other trading partnersfailure to make performance commitment arrangements, are conducive to protecting the interests of shareholders of listed companies.

Previous application documents show that in this transaction, the largest shareholder of the underlying asset Alpha is Chongqing Diaoyi, and both Chongqing Diaoyi and Shanghai Zhunyi are the concerted actors of giant investment, with a total holding of 32.92% of Alphas equity. The compensatory obligors of this performance commitment are Chongqing Diaoyi and Shanghai Zhunyi, while the other counterparties have not made performance commitments. In addition, the feedback also refers to the hope that Giant Network will further supplement the realizability of Playtikas forecast of operating income and net profit in 2018, combining with the performance of Playtika up to now, and the specific basis and realizability of Playtikas forecast of sustained growth of operating income in the forecast period of supplementary disclosure combined with the development trend of Playtikas industry and the forecast period of supplementary disclosure. Giant Network said in the announcement that the company and related intermediaries will timely organize relevant materials to submit to the CSRC administrative licensing application acceptance department within the prescribed time limit in accordance with the requirements of the above notification. The company will actively promote related work, and timely fulfil the information disclosure obligations according to the progress of the aforementioned matters. Source: Liable Editor of Netease Science and Technology Report: Yao Liwei_NT6056

Previous application documents show that in this transaction, the largest shareholder of the underlying asset Alpha is Chongqing Diaoyi, and both Chongqing Diaoyi and Shanghai Zhunyi are the concerted actors of giant investment, with a total holding of 32.92% of Alphas equity. The compensatory obligors of this performance commitment are Chongqing Diaoyi and Shanghai Zhunyi, while the other counterparties have not made performance commitments.

In addition, the feedback also refers to the hope that Giant Network will further supplement the realizability of Playtikas forecast of operating income and net profit in 2018, combining with the performance of Playtika up to now, and the specific basis and realizability of Playtikas forecast of sustained growth of operating income in the forecast period of supplementary disclosure combined with the development trend of Playtikas industry and the forecast period of supplementary disclosure.

Giant Network said in the announcement that the company and related intermediaries will timely organize relevant materials to submit to the CSRC administrative licensing application acceptance department within the prescribed time limit in accordance with the requirements of the above notification. The company will actively promote related work, and timely fulfil the information disclosure obligations according to the progress of the aforementioned matters.