Digital China to spend 楼5 bln on stake in SJI

Nov. 3, 2009 (China Knowledge) - Digital China Holdings Ltd<0861>, the country's largest IT products distributor and IT services provider, is in talks with Japanese systems developer SJI Inc about buying into the latter, sources reported.

It is estimated that the deal will involve about ¥5 billion. However, SJI spokesman Hideaki Kinuta did not comment on the deal.

Digital China, in conjunction with affiliated firms, is expected to become the largest shareholder of SJI through private placement or stock warrants.

The capital transaction will give Digital China access to SJI's technology, while the Japanese firm expects to gain orders from Chinese governments, financial institutions and telecommunication firms.

SJI predicted that strong demand in systems development will develop in China along with economic growth and hopes to grow its profits by expanding its sales network in China.

Digital China is a spin-off of Lenovo Group Ltd<0992>, the world's fourth-largest PC manufacturer. The former currently has regional centers in 19 Chinese cities.

The firm saw net profit skyrocket 129.86% year on year to HK$262 million in the period from April to June. Its revenue increased 6.49% year on year to HK$10.66 billion during the period, according to an earlier report from China Knowledge.