DIAMOND BAR, Calif., Dec. 7, 2005 (PRIMEZONE) -- Sun New Media Inc. (OTCBB:SNMD) (SNMI) today announced an agreement with its parent company Sun Media Investment Holdings, Ltd. ("Sun Holdings"). Under the agreement, SNMI will purchase 75 million common shares of Sun Business Network ("SBN") from Sun Holdings. SBN is a publicly traded company on the Singapore Stock Exchange. Once the transfer is complete and pending the closing of a previously announced transaction between SNMI and SBN, SNMI will control 29% of the publicly traded shares in SBN. As part of the agreement, Sun Holdings will also grant SNMI limited use-rights to a 32,440 km fiber-optic network in the People's Republic of China.
According to the terms of the agreement, SNMI will purchase 75 million shares in SBN, in exchange for 2,008,929 of its common shares issued from treasury to its parent company, Sun Holdings. The exchange ratio implies a significant premium over the current trading price of SBN, representative of the fact that SBN's share price has been trading at a substantial discount to its net tangible assets. SNMI's management believes that SBN can play a strategic role in constructing the company's interactive multi-media marketing model. The 75 million SBN shares represent 10.15% of all the ordinary shares of SBN.
Sun Holdings has also agreed to make available 1G of bandwidth on the 32,440 km two-core national IP protocol fiber optic network, which it controls through its 27% stake in Asia Network Technologies, Ltd. ("ANT"), at no additional expense to SNMI. The use of the fiber-optic network, which services more than 440 cities in China, gives SNMI a low-cost, high-impact delivery method for its interactive marketing and multimedia content.
About Sun New Media
Sun New Media Inc (SNMI) is one of China's first integrated, interactive business-to-business marketing services company for consumer products companies and their channel and distribution partners. SNMI plans to create a core group of businesses that includes advanced interactive content development and distribution units, sales and marketing services, and channel management software solutions. SNMI is well positioned to capture a share of China's multi-billion dollar business-to-business (b2b) multimedia services market.
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For more information on Sun New Media Inc., visit the Company's website at: http://www.sunnewmedia.net
This press release includes statements that may constitute "forward-looking" statements, usually containing the word "believe," "estimate," "project," "expect," "plan," "anticipate" or similar expressions. Forward-looking statements inherently involve risks and uncertainties that could cause actual results to differ materially from the forward-looking statements. Factors that would cause or contribute to such differences include, but are not limited to, continued acceptance of the Company's product and services in the marketplace, competitive factors, changes in regulatory environments, and other risks detailed in the Company's periodic report filings with the Securities and Exchange Commission. In addition, there is no certainty that the transactions described above will be completed or, if completed, that the terms for such transactions may not change before completion. Nor is there any certainty that the Company will be able to benefit from the described transactions in the manner currently expected. By making these forward-looking statements, the Company disclaims any obligation to update these statements for revisions or changes after the date of this release.