ATV seeks strategic investors in run-up to listing

PUBLISHED : Wednesday, 13 July, 2005, 12:00am
UPDATED : Wednesday, 13 July, 2005, 12:00am

Asia Television (ATV), Hong Kong's No2 free-to-air broadcaster, is in the process of selecting two strategic shareholders before it goes public at the end of the year, according to a source at the station.

'We are in talks with five or six mainland and foreign companies and will select two of them to become strategic investors,' the source said.

It is understood China International Trust & Investment Corp Group (Citic Group) is among the interested parties, along with companies from South Korea, Malaysia and Singapore.

A Chinese media report said Citic was due to sign an agreement to buy a stake in the television station next week, but a spokesman declined to comment yesterday.

'Citic and ATV can be complementary in their business,' the source said, adding that one of Citic's subsidiaries, Citic Guoan, operates cable television networks in 17 cities and provinces serving about four million subscribers.

'We will explore doing digital TV business in China, as digital platforms like Citic Guoan lack good content. We may try to get landing rights for ATV channels or act as a content provider to boost our revenue,' the source said.

ATV is also in the process of securing landing rights to make one of its channels available nationally in three-star hotels and higher and in foreign and overseas Chinese compounds.

The company has had landing rights in Guangdong since 2003. At present, its channels are broadcast in nine cities in the Pearl River Delta.

To be able to collect advertising revenue from the province, ATV formed a joint venture with Guangdong government-backed Southern Broadcasting Media Group (SBMG) last year.

'We are now getting revenue from Guangdong provincial television stations and we are in talks with the nine cities in the Pearl River Delta about a revenue-sharing model. We expect to reach an agreement with three cities by the end of this year,' the source said.

ATV also sells its own advertising slots in Guangdong with the help of a local advertising agency.

'As we share a fixed proportion of revenue with mainland partners - unlike Television Broadcasts [TVB] which only gets a minimum payment of $50 million per year - we expect our revenue from the province to be two times greater than TVB's in the future,' the source said.

SBMG has also been negotiating to become a stakeholder in ATV since forming the joint venture.

ATV's current shareholders include company chief executive Chan Wing-kee, chairman Wong Po-yan and Phoenix TV chairman Liu Changle. ATV has a market capitalisation of between $4 billion and $8 billion. If it sold 25 per cent of new shares in a flotation, it would raise between $1 billion and $2 billion, the source said.

ATV aims to confirm the two strategic investors before submitting its listing application.