LONDON (Alliance News) - DJI Holdings PLC on Thursday said it has agreed a partnership with Beijing NewNet Science & Technology Development Co Ltd for a new payment system for the Xinhua News mobile app, including an investment which it will fund with a share placing to raise GBP10.5 million.
DJI will invest and cooperate with Beijing NewNet, which has a partnership with Xinhuatong Network Co Ltd and branch offices of Xinhua News Agency, the national news agency of China, to supply a platform to enable payment of bills through the Xinhua News application.
The AIM-listed company will raise GBP10.5 million through a placing of 17.6 million at 60 pence per share, to be conducted by Mirabaud Securities LLP. Shares in DJI were down 12% at 61.00 pence Thursday morning.
Under the agreement, DJI's technology and platform will enable the Xinhua News App to facilitate mobile payments, allowing users in China to pay utility bills for services such as electricity, gas, water, mobile-phone top-ups and traffic fines in an initial 7 of 12 targeted provinces. The agreements are for an initial three-year period and provide for a profit share between the parties.
The company said it has recognised the need to strengthen its board membership as it grows, and plans to appoint a chief financial officer and representatives of its Chinese operations in the coming weeks.
Elsewhere, DJI said that securing this agreement has allowed it to favourably renegotiate the terms of its outstanding convertible loan notes, and it expects to shortly apply for a secondary listing on New York's NASDAQ market.
It had originally hoped to submit an application for a secondary listing before the end of March, but pushed this back due to the Xinhua agreement, and now hopes to secure a listing early in the third quarter of 2016.
"The Xinhuatong partnership, utilising our platform to support the Xinhua News App, is a game changer for DJI, both strategically and financially. Together with Xinhuatong and NewNet, we have the opportunity to place our technology at the heart of one of China's leading and most important portals," said DJI Chief Executive Officer Darren Mercer in a statement.
"We expect this partnership to make a substantial contribution to DJI's revenues in the remainder of 2016 and beyond," Mercer added.
By Hana Stewart-Smith; hanassmith@alliancenews.com; @HanaSSAllNews
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