Beleaguered pay-television network i-Cable will be sold to a new group of investors, pursuant to a share offer announcement at the Hong Kong Stock Exchange on Thursday evening.
The new investors include Hong Kong real estate moguls Henry Cheng Kar-shun and David Chiu Tat-cheong. Chiu’s family owned the now-defunct Asia Television in the 1980s.
Founded in 1993, i-Cable operates a 24-hour Cantonese-language news network in Hong Kong, and has received plaudits for its investigative journalism in mainland China.
But its future was plunged into uncertainty last month after current parent company Wharf Holdings announced it would cease funding the network upon the expiry of its commitments. Its current pay-television licence expires on May 31.
i-Cable was given a deadline of April 26 to inform the Communications Authority whether it will accept an extension of the licence.
However, the network has applied to the government to extend the deadline, NowTV reported on Thursday evening.
The new investors will purchase shares in i-Cable through a vehicle named Forever Top (Asia) Limited.
Forever Top attempted to apply for its own free-to-air television license in 2015, but the application process was put on hold in 2016.
i-Cable announced at the stock exchange on Thursday evening that its new owners will cut down on the network’s expenses: “[i-Cable and Forever Top] have been working together to formulate an organisational restructuring targeting to achieve substantial savings of HK$200 million in annual operating expenses.”
Executive director Chiu Ying-chun told RTHK it was too early to speculate on whether there would be any dismissals of personnel, and which departments would be affected.
In a press release cited by Stand News on Friday, Forever Top added that it would strengthen the financial news segment of the television network in order to cater to the needs of the business community.
HK$1 billion injection
The Forever Top investors will also underwrite an offer of some 3 billion shares to existing i-Cable shareholders, which is expected to raise HK$704 million in cash for the television network.
Following the completion of the offer in September, the Forever Top investors will own between 40 per cent and 54 per cent of i-Cable – depending on the enthusiasm of existing shareholders in purchasing new shares.
Current parent company Wharf Holdings will not purchase any new shares in the offer. However, it will inject another HK$300 million into i-Cable by converting existing loans to the network into shares.
i-Cable will therefore receive a total capital injection of around HK$1 billion in order to continue its business.