Hong Kong pay-TV leader i-Cable taps main shareholder for more funds to help end decade of losses

Georgina Lee
·2-min read

Hong Kong’s biggest pay-TV operator i-Cable Communications is turning to its key shareholder again for cash to help turn around its business and compete with well-funded home rivals.

The firm is selling HK$200 million (US$25.8 million) worth of convertible bonds to Forever Top Limited, its controlling shareholder with a 43.2 per cent stake, according to a stock exchange filing. The 10-year securities will pay 2 per cent coupon annually, and may be converted into ordinary shares at HK$0.068 each, a 13.3 per cent premium over its last-traded price.

Forever Top is owned by five parties, including its chairman David Chiu, billionaire Henry Cheng Kar-shun, Chow Tai Fook Enterprises and John Huan Zhao of private equity firm Hony Capital.

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i-Cable has been losing money for at least a decade, competing with the likes of Now TV, Viu TV and Hong Kong Broadband Network in a city of 7.5 million people. i-Cable had 754,000 pay-TV subscribers as of June 2020, giving it a 38 per cent share of the market, according to its 2020 interim report and data from the Office of the Communications Authority.

i-cable retrenched some of its staff in December as part of its restructuring to trim costs and preserve cash. Photo: Felix Wong
i-cable retrenched some of its staff in December as part of its restructuring to trim costs and preserve cash. Photo: Felix Wong

In December, i-Cable laid-off or reassigned some 100 staff in a bid to survive the economic downturn sparked by the Covid-19 pandemic.

The latest plan is the fourth time the firm is tapping its owners for survival over the past two years, after using up its resources. They included a sale of HK$568 million of convertible notes to Forever Top in June 2019, as well as making a HK$84.5 million cash call to all shareholders in the same month, according to its financial reports.

“The Board is of the view that the [convertible bond agreement] is necessary to recapitalise the business to allow sufficient time for the restructuring initiatives to be fully implemented,” it said in the filing. The fresh capital will be used to enhance its network infrastructure and acquire programmes, among others.

The deal is still subject to approval by minority shareholders at an unspecified general meeting, and approval by the Hong Kong stock exchange.

i-Cable is required to invest HK$3.45 billion from 2017 to 2023 in capital investment and programming contents under its concession starting from June 2017 to May 2029, according to its filing.

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