500.com To Become Majority Stake Holder In Loto Interactive

Chinese lottery provider 500.com has entered into a share subscription agreement to buy approximately 169 million new Loto Interactive solutions company shares, taking its stake from 33.7 percent to approximately 54.2 percent.

The transaction will see 500.com pay a total valuation of about HK$105m (£9.9m/€11.2m/$13.5m), while after it is done, Loto Interactive is expected to become a 500.com subsidiary.

Varying services

The company of Loto Interactive and its subsidiaries consists primarily of data processing and storage facilities and mobile gaming delivery, as well as money lending in Hong Kong.

It also currently operates three major data centers, providing customers who engage in cryptocurrency mining with premises, hardware support, power supply, ancillary supervision and management.

Bitcoin mining machines

Cryptocurrency mining is a field that 500.com recently joined following the appointment earlier this month of Xianfeng Yang, who previously managed the data centers of Loto Interactive, as its current chief executive. 500.com then purchased a range of Bitcoin mining machines from unidentified US sellers, worth about £ 10.7m.

Loto Interactive entered into an agreement to purchase the remaining equity interests in its indirectly owned subsidiary, Ganzi Changhe Hydropower Consumption Service Co., at the same time as the 500.com share subscription agreement.

For a cumulative valuation of about CNY88.2m (£10.0m/€11.3m/$13.7m), the remaining interests in Ganzi Changhe will be purchased from two sellers. Loto Interactive currently owns 51 percent of the company’s equity interests, and will own 100 percent of its equity interests when the transactions are completed.