RNS21 Oct 2015 09:21
DJI targets secondary listing on NASDAQ exchange
DJI Holdings plc (AIM: DJI, "the Group", "DJI"), a licensed promoter and distributor of Chinese sports and welfare lottery products to third party retailers and direct to consumers, is pleased to announce its decision to obtain a secondary listing of its shares on the NASDAQ Exchange in the United States.
The Board of DJI believes that a NASDAQ listing, and the enhanced market liquidity that it would bring, will assist the Group in developing a stronger institutional shareholder base. This is a benefit already enjoyed by DJI's sector peers on major international exchanges and one that the Board expects to be of great value to the Group.
A formal evaluation process for a secondary listing was announced and commenced by DJI in December 2014, with investor discussions held in both Hong Kong and the US. Encouraged by the Group's successful diversification outside lottery sales, exploiting the strengths of its technology platform to generate significant complementary revenues, supported by deep and long-standing relationships in China with Government agencies and key channel partners, the Board believes that the NASDAQ exchange is best suited to recognise the positioning of the business in the technology sector and afford DJI an appropriate market valuation.
The timing of this decision is, DJI believes, reinforced by the Chinese State Council's Public Announcement of 14 October regarding faster approval and administrative processes for operators, while allowing provincial lottery centres more flexibility in increasing pay-outs for their own games. This is the first major policy change for China's lottery industry since online sales were suspended in March and DJI views it as significant progress towards the announcement of new regulation and the recommencement of sales. The Group therefore believes it is appropriate to conclude the secondary listing process in readiness for the new regulatory landscape.
It is hoped that since DJI expects to join NASDAQ as a Foreign Private Issuer, it should be possible to complete the secondary listing process during Q1 2016. Advisers have commenced work and the Board will keep shareholders fully appraised of progress.
Commenting on this development, Chief Executive Darren Mercer said:
"The Board outlined at the end of 2014 that it wished to seek a secondary listing on a more liquid exchange and we believe that this process would have already been concluded had it not been for the temporary suspension of the sale of online lottery products in China. Now, with the first steps towards regulatory change already taken, DJI is progressing a secondary listing in order to focus fully in 2016 on the opportunities that we expect the new lottery landscape to present.
While lottery sales continue to be a key part of the Group, the recent exciting developments in our business underline the diverse application of our technolog