HKCTS is seeking strategic investment from Beijing-based tour operator Ming Trip and Shenzhen-based Ruiheng Investment Management for a capital restructuring of its OTA subsidiary Mangocity.
On December 28 Ming Trip said it was offering up to 40 million shares at up to RMB12 per share to an unspecified party to raise up to RMB480 million in capital for an external investment.
HKCTS is making this move in response to developments in the online industry and reshuffling of players in the online travel industry. It hopes to leverage systemic reforms and utilize capital and market forces to lead Mangocity to new development opportunities and open new areas for expansion.
After the restructuring Mangocity no longer be a sole State owned enterprise and its administrative regulations and marketization competition will be led by its board according to its new governing structure.
In the future Mangocity will enact a full-scale reorganization of its upstream and downstream resources to strengthen its control over tourism resource suppliers. It is also seeking greater price control over and improved differentiation in its outbound tourism products.
Meanwhile Mangocity will enhance its online sales platform and marketing capacity while developing partnerships with offline tour operators and creating offline sales channels that suit its operational needs.
This partnership is also a revolutionary development in the integration of China’s domestic tour operators and State–owned enterprises that will help Mangocity to have more efficient operations, reform its governing structure and get to the root of its issues of systemic restrictions.
Mangocity’s revitalization and boosted innovative capacity will have a positive effect on State enterprise reforms and the online industry development.(Translation by David)
