At first glance, online role playing game World of Warcraft would appear to have little to do with the rather more down to earth world of solar.
However, Nasdaq-listed online gaming company and blockchain business The9 is about to dip its toe into the water in the electric vehicle sector by acquiring a near 10% slice of Shanghai-based monosilicon solar company Comtec Solar’s EV and battery storage unit.
Comtec Solar Systems Group Ltd announced on Monday it had entered an agreement to offer up 9.9% of its Kexin EV and battery business in return for RMB9.8 million ($1.43 million) worth of shares in The9, which happens to be the licensed distributor of World of Warcraft in China.
Comtec Group’s 63% stake in Kexin would be reduced to 53.1% after it trades the Comtec Solar China subsidiary solely responsible for the 9.9% holding in the EV unit to The9, via the latter’s 1111 subsidiary.
With The9 having previously made a commitment to invest in electric vehicles, it appears Comtec Group chief financial officer Chau Kwok Keung may have suggested the tie-up, as he holds 300,000 shares in the Shanghai-based online gamer.
With the 3.4 million The9 shares involved in the exchange valued at $0.41 per share, Comtec expects to make a gain of RMB6.6 million by selling the stock on the open market. That estimate is based on The9 stock generating RMB9.8 million and Comtec having invested RMB3.2 million in its 9.9% chunk of Kexin.
The proceeds will be used for general working capital according to Comtec, the same destination as the HK$7.8 million (US$998,000) the Hong Kong-listed manufacturer expects to bank from two private share subscriptions announced this morning.
Comtec will issue two tranches of shares amounting to 6.48% of the enlarged company at a price of HK$0.055 per share.
Comtec acquired a 70% holding in Zhenjiang Kexin Power System Design and Research in October 2017. In November last year, the Chinese solar manufacturer and project developer brought in Singaporean consultancy ISDN as a 10% shareholder in the EV business as part of a joint venture agreement.