i-Cable down 21 pc despite white knights ride to rescue with plans for expansion

Shares of i-Cable dived to 46 Hong Kong cents shortly after market open, down 21 per cent from its previous close of 61 Hong Kong cents. The company had suspended trading for three days pending the release of an announcement that involves “inside information”. By 10am, shares had erased some losses and fallen 13 per cent to 53 Hong Kong cents.

The decline came after i-Cable announced Thursday night that it had been rescued by a consortium of white knights led by property tycoon David Chiu Tat-cheong together with New World Development chairman Henry Cheng Kar-shun and others, who plan to use the broadcaster as a foundation on which to build a new media company.

“The share price dropped as the market is not sure if the HK$1 billion injection is sufficient to help with a turnaround for i-Cable, which has suffered losses for many years. In addition, the rescue plan involves right issues which require existing shareholders to pay for the offer of shares. That is not welcomed by investors,” said Ben Kwong Man-bun, director of KGI Asia.

But Kwong said the future share price of the company should become more stable with the help of the white knight.

“It all depends on what the next business plan of the new buyers will be. If the white knight has a good development plan for i-Cable, it would be positive for the future of the company.”