Hong Kong, July 03: US media titan AOL Time Warner is selling a 64 per cent stake in its China TV unit to a firm backed by Asia's richest man Li Ka-shing for $37 million, Li's tom.com said on Wednesday. AOL's decision to sell its controlling stake in China Entertainment Television (CETV) continues a pullback from China by the media giant, which held out big hopes for the market when it won the right to broadcast in the province of Guangdong. It was seen as a beachhead for an expansion to reach China's estimated one billion-plus viewers.

As part of the deal, tom.com said it will issue HK$53 million ($6.8 million) in new shares, consisting of 21 million shares priced at HK$2.535 each. The company's shares gained 4.26 per cent to close at HK$2.45 on Wednesday.
Tom.com also said it will provide all of the funding needs for CETV, up to $30 million, for the next 30 months. The deal values CETV at about $55 million.
Tom.com said AOL will continue as a stakeholder in CETV with the remaining 36 per cent. It said AOL will also retain the right to buy back tom.com's stake from 2007 at market value, or at tom's original investment cost plus a 50 per cent internal rate of return, whichever is higher. Bureau Report