DVN (HOLDINGS) LIMITED -- Entering Into a Letter of Intent to Establish a Joint Venture Company (Announcement)

DVN (HOLDINGS) LIMITED -- Entering Into a Letter of Intent to Establish a Joint Venture Company (Announcement)

HONG KONG, Nov. 28 /Xinhua-PRNewswire/ --

DVN (HOLDINGS) LIMITED
(INCORPORATED IN BERMUDA WITH LIMITED LIABILITY)
(STOCK CODE: 500)

The Company is pleased to announce that on 28 September 2006, a wholly- owed subsidiary of the Company has entered into a non-legally binding letter of intent to establish a joint venture company to develop the digital broadcasting business in Nanchong City in Sichuan of the PRC.

THE JOINT VENTURE

The Company is pleased to announce that on 28 September 2006, a wholly- owed subsidiary of the Company ("DVNS") has entered into a non-legally binding letter of intent ("LOI") with Nanchong City Broadcasting TV Network Transmission Centre ("NCBN"), an independent third party not connected with the Directors, chief executives or substantial shareholders of the Company or any of its subsidiaries, or their respective associates, to establish a joint venture company to develop the digital broadcasting business in Nanchong City, Sichuan of the People's Republic of China ("PRC").

Pursuant to the terms of the LOI, the parties intend to establish a joint venture ("JV") which will be owned as to 49% by DVNS and 51% by NCBN. It is intended that NCBN will inject the relevant rights of the network, equipment and etc. and the Group will be responsible to provide the platform and equipment for the integration of digital broadcasting in such network. NCBN will also be responsible to procure the JV to become the exclusive operator to provide digital broadcasting and related services to Nanchong City and obtain all approvals from the relevant government authorities. Final terms of the agreement to establish the JV will be subjected to further negotiation and the Company will make necessary disclosure according to the Listing Rules when appropriate.

INFORMATION OF THE COMPANY

The Company is the leading provider of digital TV broadcasting systems integrator and terminal products in the PRC. It has installed more than 40 digital broadcasting systems and its patented products have been extensively deployed. In 2005, the Company cooperated with the Qingdao City Radio and Television Bureau to migrate the entire city to digital, building the first "model city" in digital broadcasting in the PRC. The Company also scored success in shifting Foshan to digital broadcasting. In 2006, the Company achieved further success in migrating Guangxi to fully digitalized and making Guangxi the first "digitalization model" at the provincial level. The Company's set-top boxes have received license from China's State Administration of Radio Film and Television ("SARFT") and are widely adopted in the PRC market. The Group generates its revenues from the sales of set top boxes, broadcasting platforms, subscription fees and related services.

REASON OF FORMING THE JV

Nanchong City has a population of approximately 7,300,000 with 400,000 cable TV subscribers, and it has network coverage of at least 800,000 households in various counties, implying an ample market room for growth. As part of the ordinary course of business of the Group, the Group always wishes to expand its coverage and market share in different areas in China. Pursuant to the terms of the LOI, DVNS will be compensated for its sales of the set-top boxes to the cable operators and end-users by having a share in the monthly subscription fee paid by the end-users. Also, the Group shall be able to share the revenue from the value added services provided to the end-users.

The Company will continue to develop its digital broadcasting business in other provinces with similar business model and will seek ways to strengthen its capital base and financial position, in order to facilitate its rapid roll-out of TV digitalization in China.

As at the date of this announcement, the Board comprises Mr. Ko Chun Shun, Johnson, Mr. Lui Pan, Terry, Mr. Luo Ning, Mr. Qiu Yiyong, Mr. Jin Wei, Mr. Wang Daoyi and Mr. Hu Qinggang (each of whom is an executive Director) and Mr. Shaw Sun Kan, Gordon, Mr. Jerry Sze, and Mr. Itzhak Shenberg (each of whom is a non-executive Director), and Mr. Chu Hon Pong, Mr. Liu Tsun Kie and Mr. Yap Fat Suan Henry (each of whom is an independent non-executive Director).

By order of the Board
DVN (Holdings) Limited
Johnson Ko Chun Shun
Chairman

Hong Kong, 27 November 2006

Note: This announcement is issued as supplementary information to the press release titled "DVN to Migrate Nanchong in Sichuan to Digital Leveraging on Innovative Business Model to Further Expand Leadership in China Digital TV Market" by DVN (HOLDINGS) LIMITED issued on the same day.

Source: DVN (Holdings) Limited

CONTACT: Sam Wong of DVN Holdings, +852-2585-7295, or fax,
+852-2511-5522, or email, samwong@dvnholdings.com; or Synchronic
Communications Limited fro DVN Holdings, Avan Fung or Lina Chan,
+852-9633-4904, or +852-9228-6570, or+852-2136-8188, or fax, +852-2136-8192,
or avan@synchronic.com.hk, or lina@synchronic.com.hk

Web site: http://www.dvnholdings.com/
http://www.synchronic.com.hk/

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