Ruili to take Galaxy stake

PUBLISHED : Monday, 25 April, 2005, 12:00am
UPDATED : Monday, 25 April, 2005, 12:00am

Ruili Holdings, a loss-making maker of multimedia products, planned to take a $300 million to $400 million majority stake in Galaxy Satellite Broadcasting, the loss-making pay-television unit of Television Broadcasts (TVB), Ming Pao Daily reported yesterday.

Ruili's shares have been suspended since Tuesday pending an announcement in relation 'to a very substantial acquisition and fund raising exercise', said a company announcement on the Hong Kong stock exchange website.

TVB has been seeking another buyer for the 51 per cent stake, as normally it is not allowed to own 50 per cent or more of Galaxy.

However, the government granted TVB a waiver to allow TVB to fully own Galaxy for up to one year from December 28 last year.

If the acquisition goes through, Ruili's payment of up to $400 million will be well below the $542 million Intelsat paid for its 51 per cent stake in Galaxy.

But Ruili's reported payment of for the stake would also far exceed its market capitalisation of $146 million on Tuesday.

It posted a net loss of $10.42 million in the second half of last year on turnover of $52.56 million.