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Peggy Sito

Wharf (Holdings) plans to give investors shares in i-Cable Communications as part of its interim dividend payout.

Wharf made the announcement yesterday when unveiling its first-half results. Earnings in the period rose 11 per cent to $1.3 billion while turnover fell 2 per cent to  $5.46 billion.

The dividend payout solves a small problem for Wharf. The conglomerate holds about 79 per cent of i-Cable and has yet to meet the minimum 25 per cent public free float requirement. A waiver is set to expire on November 23.

Wharf - which has investments in property, hotels, container terminals and telecommunications - will give shareholders one i-Cable share for every 10 Wharf shares held. The total distribution will number about 244.7 million i-Cable shares valued at $2.075 each as of yesterday.

After the distribution, its holdings in the pay-television unit will drop to 67.12 per cent.

The percentage of i-Cable in the hands of the public will increase from 20.56 per cent to 26.62 per cent. The shares will be distributed on September 19.

In addition to the i-Cable shares, Wharf shareholders will receive 12 cents per share in cash, for an interim dividend valued at 32.75 cents per share. DBS Securities analyst Winnie Chiu said Wharf shareholders would be glad to receive the i-Cable shares.

But analysts said the payment plan was not good for investors in the pay-television unit.

Peter Schloss, managing director of Mediavest, said i-Cable shares were fully valued. In addition, the company's profit margin was falling and its broadband services were becoming increasingly commoditised.

He said Wharf shareholders would not hang on to their i-Cable shares for long. 'If I were a shareholder, I would sell my shares to take the cash.'

Analysts said Wharf's first-half results were in line with expectations. Profit rose largely because of the absence of provisions for property projects. In the first half of last year, Wharf made $374 million in provisions. Operating profit for property investment dropped 10 per cent to $1.44 billion.



Wharf shareholders to get pay-TV stock