Chinese state-owned fund Tsinghua Unigroup International is reported to have invested $124 million (£80 million) for a 15.2% stake in New York listed Chinese sports lottery operator 500.com, through a purchase of newly distributed shares.
Business news sources have reported that Tsinghua will acquire a total of 63.5 million shares in 500.com. The news of the stake purchase by Tsinghua saw 500.com share price hit a six month high of $25.50.
Tsinghua has further confirmed that director Zhao Weiguo would join the 500.com board of directors, as the lottery operator looks to re-structure its executive management team, following turbulent times for the company.
2015 has seen 500.com share price tumble following a suspension of its lottery services by the Chinese Ministry of Finance in February. The operator has further been hit with multiple US investor class action lawsuits regarding misrepresentation of its business practices and operations in the build up to its December 2013 IPO.
In May 500.com announced that Man San Law had stepped down as CEO following the publication of dismal performance results for the Q1 2015 operating period.
Financial analysts have noted that the backing of a state owned investor in 500.com, will likely help turn around the operator’s performance.
Tsinghua Unigroup have several major investments in Chinese businesses and state owned institutions including the Tsinghua University, whose notable alumni include Chinese Premier Xi Jinping and former president Hu Jintao
New 500.com CEO Zhengming Pan, commented on Tsinghua Unigroup investment,
“We want to welcome Tsinghua Unigroup as a shareholder to our company and to express our appreciation to Tsinghua Unigroup’s confidence in our company. We believe the partnership between Unigroup and our company will be long term and mutually beneficial. The partnership will also bring Tsinghua University’s strong technical and research capabilities to 500.com.”