Poynt Corporation (TSX-V: PYN; OTCQX: PNYTF) said it has finalized the structuring of its first Asian operating entity, Poynt Asia (Hong Kong) Limited (Pynat HK) and the formation of a joint venture, China Youth Poynt Limited, between Poynt HK and China Youth League’s affiliated entity, China Youth Goyor Technology (Beijing) Co., Ltd.
Poynt Corp. subscribed for a 60% equity interest in Poynt Asia, Ltd., a Bermuda company, for nominal consideration. The balance of the equity of Poynt Asia is owned, as to 20%, by Socius, CG II Ltd., Poynt’s single largest shareholder (owning or controlling approximately 16% of the outstanding Poynt common shares), and as to 20%, by an arm’s length party.
By way of an intercompany loan of $7 million from Poynt Corp. to Poynt Asia, $2 million was used by Poynt Asia to acquire a 100% equity interest in Poynt HK from an arm’s-length party. The remaining $5 million was in turn loaned by Poynt Asia to Poynt HK to fund the commencement of operations of the China JV.
Poynt HK will have a 70% economic interest and a 49% equity interest in China Youth Poynt Limited.
Run by China’s Communist Party, The Communist Youth League of China, known as the China Youth League (CYL), is a youth movement for youth between the ages of fourteen and twenty-eight. China Youth League has over 83 million members.
As an initial objective of the China JV, China Youth Goyor will focus on obtaining the Chinese Ministry licenses required for conducting the business of China Youth Poynt Limited, securing data service agreements and preload agreements in China with major telecom companies, and facilitating consumer usage of the Poynt mobile platform in China, initially among CYL’s over 83 million members.
China Youth Goyor is to deliver at least 20 million active users in or around August 2012. Based on preliminary discussions, China Youth Poynt Limited anticipates as many as 60% of CYL’s membership may become active users. Additionally, the China Youth Poynt Platform will be marketed by the China JV to the broader smartphone population in China.