State assets regulator approves Tencent's Navinfo stake

A logo of Tencent is seen at the headquarters of Tencent in Shenzhen city, south Chinas Guangdong province, 29 March 2013. [Photo/IC]

BEIJING - China's State-owned Assets Supervision and Administration Commission has approved the transfer of part of China Survey's stake in digital map provider Navinfo to Chinese IT giant Tencent Holdings, the China Securities Journal reported on Thursday.

Citing a statement from Shenzhen-listed Navinfo on Wednesday night, the report said Tencent will hold an 11.28 percent stake in Navinfo after paying 1.17 billion yuan ($187.6 million) while China Survey's stake will decline to 12.58 percent.

Navinfo's shares resumed trading on Thursday after the deal was given the green light, with its shares jumping by the daily limit of 10 percent to 16.92 yuan at the opening of the Shenzhen Stock Exchange.

The move should strengthen Tencent's mapping services, in competition with Baidu Map by Chinese Internet search company Baidu Inc and AutoNavi, which was bought by Chinese e-commerce leader Alibaba Group Holdings last month.

Investing private capital into state-owned enterprises (SOEs) like China Survey is also approved of under the ongoing process of reforming SOEs, considered pillars of China's economy.

China has been endeavoring to promote market-oriented reform in SOEs by breaking monopolies and introducing competition.

"It is a bold attempt," said Wu Jinfeng, general manager of China Survey and chief engineer of China Aerospace Science and Technology Corporation (CASC).

The deal is a new development and CASC will take this lead to promote other mechanisms with mixed equity structures, he added.

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