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Joyce Man

ATV is running out of cash, and creditors are increasingly becoming impatient, a court heard yesterday. 
Details of the privately owned station's dire financial straits were revealed in the Court of First Instance during a hearing over an application by Taiwanese snack tycoon Tsai Eng-meng  for an injunction against any ATV share deals with a third party.
Daniel Fung Wah-kin SC representing the station, said a vice-president of finance at Asia Television said the station was running out of cash. 
According to the vice-president, the station's cash in hand at  the end of March was HK$28.9 million. 
The station, which has a monthly income of HK$12 million to HK$14 million and expenditure of HK$37 million to HK$60 million, required HK$23 million to HK$50 million per month for operations. Its required budget for this year is HK$250 million.
In an affidavit, the vice-president described how solicitors for unpaid creditors were reacting with what Fung described as 'scarcely concealed disrespect' to the station's situation. 
The affidavit revealed that ATV had yet to fulfil obligations to creditors and installments that were due, including one for HK$40,000 due last month, and two for HK$300,000 for February and last month. 
'The interim injunction exacerbates the precarious financial situation,' Fung said, noting it was just one of two free-to-air stations in the city. 'It would be a huge tragedy to see it fold and to see the injunction contribute to that.'
Yesterday's hearing was part of wider litigation taken by Tsai through his company San Want Media Holdings against directors Payson Cha Mou-sing,  Johnson Cha Mou-daid  and Peter Brown. ATV and Antenna Investment,  which holds ATV shares, are also defendants in the case.
Tsai has alleged that the Cha brothers and Brown breached their fiduciary duties by allowing the issue of bonds convertible into shares of ATV worth HK 28 cents, below the minimum set in a shareholders' agreement. He claims there was a scheme to benefit Panfair Holdings,  a company in which the Chas held ATV shares, and to dilute ATV shares.
Tsai has sought to stop the Chas from selling Panfair shares to Shenzhen tycoon Wang Zheng.  
The Chas have rejected the claims. In fact, said their barrister Godfrey Lam SC, the Chas and Brown never attempted to conceal an arrangement, that Tsai claims was part of the scheme, from him. Brown notified Tsai of the arrangement and the Chas made it public. 
Lam urged the judge not to impose the injunction, saying there was nothing unlawful or alleged to be unlawful in the sale of Panfair's shares to Wang. 
Fung also revealed yesterday that Wang had offered in a letter on Monday to take up HK$400 million in eight further series of convertible bonds at 28 cents. If the court does not impose the injunction, he says, ATV has Wang's guarantee.
Tsai has offered to inject HK$150 million at 30 per cent interest per annum to ATV, set off against advertising airtime. 
Mr Justice Aarif Barma will give a decision at a later date.
Ailing ATV
Daniel Fung Wah-kin (above) said  ATV's 2010 budget is HK$250 million. Monthly operations can cost up to, in HK dollars,: $50m



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ATV - Asia Television Limited

Struggling ATV running out of cash, court told