Tom.com, the Internet and media company backed by tycoon Li Ka-shing, has raised up to HK$850 million in an unsecured loan from its three key shareholders.
In an announcement late last night, the Growth Enterprise Market-listed company said the loan was granted by three substantial shareholders - namely Hutchison Whampoa, Cheung Kong Holdings and Cranwood - which jointly control 72.64 per cent of Tom.com.
The loan was made available for Tom.com to draw down over the next 12 months at 50 basis points over three-month Hibor (Hong Kong interbank offer rate). It is to be repaid in two years, according to the announcement.
Tom.com said the sum would be used as working capital, but analysts believed the loan facility would mainly be used to finance the company's future acquisitions.
The loan was announced before today's announcement of the company's acquisition of Taiwan's Business Weekly Media Group. Sources said Tom.com was expected to pay HK$380 million for the magazine publisher.
Business Weekly is expected to generate NT$120 million (about HK$27 million) pre-tax profit for this year, representing a valuation of the magazine at 4.2 times price-to-earnings.