Mango Excellent Media Co. Ltd., the operator of Chinese online video platform Mango TV, said Monday that it plans to raise 4.5 billion yuan ($660 million) through a share sale that will enable it to expand its content library and establish new technological platforms amid intensifying competition with rivals iQiyi, Youku and Tencent Video.
The Shenzhen-listed company said that its controlling shareholder, the state-owned Mango Media Co. Ltd., plans to sell 93.6 million exiting shares to raise the funds. After the sale, Mango Media’s holding will drop to 58.9% from 64.2%.
Of the 4.5 billion yuan raised, 4 billion yuan will be used to buy TV drama copyrights and create new content including TV series and variety shows, a move that the company said is expected to generate net profits of 286 million yuan over the next four years, according to a stock filing.
The remaining 500 million yuan will be allotted for the development of smart audio-visual media service platforms which will strengthen the company’s abilities in content production and distribution, the filing said, adding that technologies including augmented reality (AR), virtual reality (VR) and mixed reality (MR) will also be adopted to make video content that can enhance audience interaction.
The fundraising plan comes after Mango TV’s self-developed reality talent show, “Sisters Who Brave Winds and Waves,” made a hit in China by means of a rarely used formula, in which 30 female celebrities aged 30 and above were invited to compete for a position in a seven-person pop group, representing a break from TV formats that usually only target young hopefuls.
In the first half of 2020, Mango TV generated 1 billion yuan in net profits, up nearly 50% year-on-year, on revenues of 4.28 billion yuan, according to its earnings report.
– This article originally appeared on Caixin Global.