SHANGHAI (Reuters) – Chinese advertising and media firm Universe Media Holdings will receive $58 million of investment from a Goldman Sachs (GS.N: Quote, Profile, Research, Stock Buzz) venture capital fund and another local fund ahead of a planned Nasdaq listing, a senior company executive said on Thursday.
The company, which places advertising on trains and railway stations expects the funds by September, the executive said.
“Most of the funds will be used to invest in our expansion of LCD screens and relevant technical infrastructures on trains and train stations,” he told Reuters.
“We are now entering a fast phase of expansion,” said the executive who did not want to be identified as he was not authorized to speak to the media.
The deal will be the last round of private fund-raising before the Beijing-based company lists on the Nasdaq, as early as this year, he said.
He declined to give an estimate for the size of the IPO because the listing plan had not been finalized, but added Goldman Sachs would probably sponsor the share sale.
A Goldman spokesman in Hong Kong and a partner of Legend Capital could not be immediately reached for comment.
Universe Media was formed in May by the merger of two Chinese firms, Epin Media and Guangyuan Media, and operates more than 75,000 LCD screens on about 500 domestic trains that show programs with advertising.
Before the merger, Legend Capital held a stake in Guangyuan and Goldman invested several tens of millions of dollar in Epin, which had nearly 50,000 LCD screens on about 300 domestic trains by the end of 2007, according to Chinese media reports.
After the merger, an investment arm of China's Ministry of Railways became a strategic investor of Universe Media, helping the firm maintain its leading position in the business.
China's Ministry of Railways had a 15-year contract with Universe Media allowing the firm to produce and broadcast video on trains and in stations, Chinese media reported.
Traditional media industries such as televisions and newspapers are highly regulated by China's Communist government, but so-called new media firms such as Universe Media and AirMedia have been growing fast.
They have been popular with foreign funds partly because of their focus on profits not politics.
The government also plans to create public and venture capital funds to invest in new media and publishing companies, state media reported on Thursday.
By George Chen