iClick Interactive Asia plans to sell its demand side marketing business

iClick Interactive Asia Group announced the execution of a definitive agreement to sell its demand side marketing solutions business in mainland China to SiAct at a consideration of RMB1M or equivalents in US dollars. The Disposal aligns with the Company’s ongoing strategic scale-down of lower-margin and higher-risk businesses in its marketing solutions segment, and the Company’s strategy of optimizing its operations and realigning its business focus to meet market trends. The uncertainties around the macro-economic conditions since the COVID-19 pandemic led to a broad-based slowdown in the advertising market in mainland China. In addition, the uncertainty in macro-economic environment with ongoing influences on market sentiment, advertising spending and promotional activities affect the profitability and cash flows of this cash intensive business segment. To support the ongoing business operation of the disposed business, prior to the closing of the Disposal, the Company shall provide a loan to the disposed business in a principal amount of RMB20M with a term of six months to support their ongoing business operations during the transition period. In addition, the Company has agreed to repay the outstanding principal of the loans previously extended by three banks to the disposed business, totaling approximately $35.0M, within six months following the execution of the Agreement. The Disposal is conditioned upon receiving approval from Company’s shareholders.