(Yicai Global) March 30 -- Tencent Music, the internet song branch of Chinese internet titan Tencent Holdings Ltd., will join with leading online Chinese takeout food delivery firm Meituan-Dianping to invest in Fujian KTVME Network Technologies Co., China's leading KTV entertainment and management system operator.
KTVME Network will increase its shares and capital to bring in Tencent Music Entertainment (Shenzhen) Co., Shanghai Hantao Information Consulting Co. -- Meituan-Dianping's operator -- and three investment fund limited partnerships, KTVME Network's parent Fujian Star-net Communication Co. announced yesterday.
These investors will contribute a total of CNY120 million (USD 19 million), of which Tencent Music and Meituan-Dianping will each pay CNY40 million and the other three investment funds combined the remaining CNY40 million. Tencent Music and Meituan-Dianping will each hold a 6.45 percent stake in the target.
Tencent Music and KTVME Network will jointly run the operation to create China's largest online and offline karaoke platform. Utilizing Tencent Music's live streaming platform, KTVME Network will achieve profitability in the live-streaming business by creating internet celebrities.
KTVME Network will also cooperate with Meituan-Dianping to attract business to its KTV venues, per the announcement.
Before this share and capital increase, Fujian Star-net Communication Co. held a 52.5 percent stake in KTVME Network through its subsidiary Fujian Star-net Entertainment Network Technology Co. (Star-net Entertainment), which holds a 51.8 percent stake in KTVME Network.
Star-net Entertainment and other current shareholders will give up the preemption right in this latest capital increase, meaning Star-net Entertainment's stake will shrink to 42.4 percent. It will remain the largest shareholder, but it will no longer control, the announcement said.
KTVME Network is a unicorn that owns the permanent rights to operate the entertainment and management systems of 70 percent of China's offline KTVs -- 90 percent of the KTV market.