On 24 August, Xinwei Group agreed to acquire 100% of the equity interests in Space-Communication Ltd. (hereinafter referred to as “SCC”) through its subsidiary Luxembourg Space Telecommunication S.A. As Israel’s sole satellite fleet operator, SCC was registered in Israel and listed on the Tel Aviv Stock Exchange. SCC is a global satellite communication service provider covering Europe, Middle East, Africa and Asia, making it a significant player in the global satellite communication industry. The proposed acquisition is a result of several rounds of negotiation and concerted efforts of the Group and SCC and SCC will become the Group’s wholly-owned subsidiary after the completion of acquisition.

Amos-2, Amos-3 and Amos-4 satellites, currently operated by SCC, provide communication service platforms, DTH and BDS multi-frequency broadcast operations for satellite TV broadcasters, as well as data transmissions for Internet, telecommunications companies, infrastructure construction and energy development operations.

The proposed acquisition is in line with the Group’s international development strategy, marking a substantial breakthrough in the Group’s endeavor to establish as a satellite operator with global coverage.

With SCC’s coverage of the Far East, the Middle East, Africa, Europe and the U.S., and Nicasat-1’s coverage of the North America, Central America, South America, Antarctica and islands across the Pacific Ocean, the combined satellite fleet of Xinwei Group will cover 95% of the world’s populated area, turning the Group into one of the few satellite operators with almost full global coverage.

The proposed acquisition is of great significance to the Group.

First, it will secure valuable satellite-orbit resources for the Group. Orbits of high value are rare resources against the backdrop of global communication satellite market integration. Areas covered by SCC’s satellite-orbit resources are countries and regions with an increasing demand for satellite communication services, among which Middle East is one of the world’s fastest growers in terms of revenues from satellite operation services.

Second, the contemplated deal will accelerate the Group’s planning and construction of an integrated space and terrestrial information network with a hybrid satellite and ground communication system, and parlay its first-mover advantage in adopting the combination method, creating favorable conditions for the construction and operation of global space Internet system. Currently, the Amos series of satellites operated by SCC include Amos-2 and Amos-3 positioned at 4° W longitude in the geo-stationary orbit, Amos-4 positioned at 65° E longitude and Amos-6 scheduled to be launched early next month to replace Amos-2. The Group can utilize these orbit resources of SCC to provide ground communication solutions and satellite communication services for areas along “One Belt, One Road” and international market. Furthermore, in light of SCC’s sound business performance, the proposed acquisition will be conducive to enhancing the Group’s profitability.

It's worth noting that once the acquisition is completed, the Group will obtain a professional team with 20 years’ experience in communication satellite operation, which shall benefit talent development of the Group.