It's certainly not every day that a company with a market capitalization around $145 million can announce striking a deal involving billions of dollars. That's what happened Monday morning for digital asset/blockchain-based fintech Seven Stars Cloud Group (NASDAQ:SSC).
New York-based Seven Stars said that it inked a three-year, $24 billion deal with National Transportation Capacity Co Ltd (NTS), China's biggest electric bus operator, to issue fixed income lease financing-based products, through its global strategic alliance network for large-scale electric bus upgrades.
The contract falls under Beijing's mandate to replace every diesel and gas-powered bus with an electric bus by 2021 to help cope with the nation's out-of-control pollution problem. The transformation to be more environmentally friendly is estimated to cost one trillion Chinese yuan ($145 billion U.S).
Under the terms of the deal, the SSC network will provide two financing campaigns: one in China and the second for international markets. For the China-based financing, SSC will conduct financing activities through the sale of fixed income products to raise 60 billion Chinese yuan (~US$8.75 billion) over three years.
For the global markets financing activities, SSC will exclusively provide both fixed income and asset digitization products to raise $15 billion U.S. over three years.
"A combination of SSC's Blockchain and AI technologies, combined with our shared mission for unlocking both liquidity and enterprise value through asset digitization, will result in a significant transformation of the entire lease financing-based fixed income market," said NTS President Jihong Huang in today's statement.
"Each of the leading ten bus manufacturers in China strongly back NTS in this initiative, and the success of this transaction with SSC will place asset-backed digital offerings firmly on the map."
Shares of Seven Stars rocketed ahead on the news from Friday's closing price of $1.97 to as high as $5.18 in Monday morning trading following the contract news. The stock hasn't held all of the gains by any stretch, sliding back to $3.09 about two hours into the session, which still represents a gain of 56.9% so far on the day.
