Troubled pay-television provider i-Cable Communications dropped 21 per cent on Friday morning as it resumed trading after announcing that it had found a white knight. 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.” In a statement late on Thursday, Forever Top said it had agreed on a deal with i-Cable’s parent, Wharf (Holdings) , for an equity injection of HK$1 billion to strengthen the broadcaster’s financial position. Hong Kong pay TV broadcaster i-Cable takes ‘important step’ to stay afloat In addition to Chiu, other backers of the consortium include New World Development chairman Henry Cheng Kar-shun, Guangzhou R&F Properties chairman Li Sze-lim, John Zhao Huan, president of private equity firm Hony Capital, and conglomerate Chow Tai Fook Enterprises. Chiu is the second son of Deacon Chiu Te-ken, who founded ATV, the free-to-air broadcaster that went off the air in May 2016. Under the agreement, about HK$704 million will come from an open offer to existing shareholders, fully underwritten by Forever Top. A further HK$300 million will come from the conversion of debt due to Wharf into an equity stake in i-Cable. An open offer allows existing qualifying shareholders to increase their stake in the company. According to a filing to the Hong Kong stock exchange, five shares will be offered for every three existing shares held by qualifying shareholders at 21 HK cents each. Following completion of the offer, Forever Top will hold 40 to 54 per cent of i-Cable’s issued share capital, depending on the take-up of the offer by the public shareholders. “Upon completion of the transaction, Forever Top will use i-Cable as the platform to drive its media business,” Chiu said in the statement. “Hong Kong has been known as Hollywood of the Orient and I believe television talent, whether back-stage or front-stage, are abundant here. I am hoping that all these talent will be given the chance to bring into play in the most flexible manner of co-operation with i-Cable.” He also said Forever Top would strive to strengthen the scope of financial news in the region as well. The announcement comes just in time to save i-Cable and its 2,176 employees from the axe. Last year, i-Cable made a loss of HK$313 million and Wharf had indicated it would cease funding the broadcaster and exit the unprofitable business of providing pay television and broadband internet. The Communications Authority had said i-Cable must fulfil its financial responsibilities before its pay-television licence matured on May 31. “With the new equity injection, i-Cable’s capital structure and operation outlook will be significantly improved – increased equity, reduced debt and possibly expanded services,” Chiu said. With the new equity injection, i-Cable’s capital structure and operation outlook will be significantly improved David Chiu, property tycoon Forever Top, which had previously applied for a domestic free-television licence, said in the statement that it had requested the Communications Authority put on hold the processing of this application until the outcome of the equity injection into i-Cable became clearer. The injection plan will require approvals from the independent shareholders of i-Cable, the Securities and Futures Commission, the Hong Kong stock exchange and the Communications Authority. Forever Top said it hoped the deal would be completed in September. Trading in i-Cable’s shares was suspended on Tuesday, pending the result of an announcement. i-Cable suspends share trading pending announcement of insider information In a statement to the stock exchange, the firm said it had applied for trading to be resumed from 9.30am on Friday.