Vista Group buys back control of Chinese subsidiary, offset by debt owed by
By Sophie Boot
Feb. 20 (BusinessDesk) - Vista Group International has bought back 7.9 percent of its Chinese entity for $7.7 million,
leaving it with 47.5 percent of the business and allowing it to treat the division as a controlled entity within the
group.
The company said it was "delighted" to bring Vista China back into the group, having agreed with Chinese partner China's
Beijing Weying Technology Co (WePiao), whose backers include the Wechat/Tencent Group, that "the time is right for Vista
Group to increase its stake and play a greater part in the future of the Vista China business".
Vista and WePiao announced the joint venture in China in March 2016, with Vista providing distribution rights to all of
its existing software, and WePiao buying Vista Group shares. WePiao is backed by Tencent Holdings, along with the China
Cultural Investment Fund and other investors, including some leading Chinese cinema chains. Its smartphone ticketing
application is embedded in the WeChat messaging app which has more than 600 million monthly active users, mainly in
China.
Vista Group and WePiao now own 47.5 percent of the business each, the company said. The cost, based on the 2016
valuation of Vista China, has been offset against what WePiao still owes Vista from the original equity purchase.
Vista is set to report its annual earnings next Wednesday. In the six months to June 30, 2017, it recognised an equity
accounted loss of $1.2 million for the Vista China associate and had received 97 million yuan with 50 million yuan
outstanding. The second tranche of the localisation fee, of 30 million yuan, or $6.4 million NZD, was due in the second
half of 2017.
Chief executive Murray Holdaway, who leaves in April to be replaced by Kimbal Riley, said the company is "very pleased
with the equity restructure and its ability to reflect the growth of the Vista China business directly within Vista
Group’s results in the future."
"Our partner WePiao has provided significant assistance but this change will enable Vista Group to play a greater part
in the strategic and operational development of the business and benefit directly from the strong revenue growth
opportunity afforded Vista China in the China film and cinema market," Holdaway said. "The Chinese cinema market is the
fastest growing in the world, with box office revenues expected to outstrip the USA by 2020 and become the largest
cinema market in the world. Vista China is in a great position to benefit from this growth and make a very meaningful
contribution towards Vista Group’s performance in the future."
In that first half, Vista said the business had performed well operationally, with an office in Beijing, staff numbers
rising to 45, and an additional 48 Vista Cinema sites. It said at the time that there was a focus to build operations
beyond Vista Cinema and the business had built an impressive pipeline from new and existing customers.
Vista shares last traded at $2.66, down 5 percent in the past 12 months.
(BusinessDesk)