Rostec, a major Russian tech corporation, has agreed to sell its 25.1% stake in mobile device maker YotaDevices to a consortium that includes Chinese companies Trinity World Management (TWM) and China Baoli. [Update Oct. 15, 2018: The deal was cancelled following a decision from the Hong Kong exchange authorities, as reported by Kommersant.]
The deal, which was announced in late July, valued Rostec’s stake at “over 3 billion rubles” (approximately $47 million at the current exchange rate), which the Russian corporation will receive in cash and China Baoli equity stake.
The consortium will get a controlling stake in the company, while Rostec will “retain the key technology elements and the possibility of their application in areas of strategic importance” for the Russian company.
A former division of Russian LTE operator Yota (Scartel), Yota Devices emerged in 2012 as Russia’s first mobile phone maker with serious international ambitions. The company was propelled into the international limelight in late 2012 when it unveiled its YotaPhone, Russia’s first Android-powered dual-screen (LCD and EPD) smartphone supporting GSM, 3G, and LTE standards.
Rostec acquired its 25.1% stake in the company in 2014. The next year, China Baoli (then known as Rex Global Entertainment) announced the acquisition of a stake in the company (the size of the stake eventually acquired remains unclear).
The Chinese company was expected to help develop and market new products, but the mass production of YotaDevices’s newest product, the YotaPhone 3, has been delayed due to a lack of financing.
The new device has also been criticized for its high price.
Nevertheless, “the demand for the [device] is much higher than the sales of previous smartphone versions, i.e. the volume of pre-orders in China only for the first month of sales exceeded 100,000 units,” Rostec stated last month.
