i-Cable boss says jobs are safe after white knight revealed plan to axe 200 staff
Struggling Hong Kong broadcaster i-Cable has sought to allay fears of significant job losses after the white knight trying to keep it afloat said it might have to sack up to 200 staff.
Chairman Stephen Ng Tin-hoi said on Friday 180 employees had already left voluntarily amid uncertainty at the pay-TV provider and the jobs of those remaining “should be safe for now”.
Earlier in the day, property magnate David Chiu Tat-cheong said up to 10 per cent of staff might have to go as part of his rescue plan to save HK$200 million in a one-off cost-cutting exercise.
“Inevitably we may have to reduce the company’s headcount by up to 10 per cent,” he said.
Chiu chairs i-Cable’s white knight, the Forever Top consortium which has proposed a HK$1 billion equity injection. The consortium also includes New World Development boss Henry Cheng Kar-shun, a long-time friend of Chiu, and Zhao Huan, executive director of mainland technology giant Legend Holdings.
The troubled broadcaster currently employs 2,176 people.
The new investors said they aimed to build up the broadcaster's financial news coverage, as well as online streaming services– a burgeoning industry powered by technology firms such as Netflix that has lured millions of viewers away from traditional TV.
“Some staff covering Hong Kong and China news are also likely to be transferred to our expanding financial news team,” Chiu said.
Ng stressed that i-Cable is not yet out of danger because it must overcome four obstacles before the deal with Chiu’s consortium can go through. It needs to secure government approval to extend the deadline for renewing its pay TV licence to the end of May, small shareholders’ agreement on the capital injection arrangement, the Communication Authority’s approval of the change of shareholders, and a Securities and Futures Commission exemption of a mandatory comprehensive offer to all shareholders.
Any failure of to fulfil these requirements would result in the closure of i-Cable, Ng warned. “If everything goes well, we could finish the deal in mid September at the earliest,” he added.
The company’s shares dived as much as 21 per cent on Friday when they resumed trading after a three-day suspension pending the announcement. However, they bounced back dramatically after Chiu’s press briefing to close at 71 HK cents, up 16 per cent.
Chiu, who amassed his fortune from real estate developments across Asia and his ownership of the Dorsett hotel chain, is the second son of late media magnate Deacon Chiu Te-ken, the founder of ATV. ATV is the city’s oldest free-to-air broadcaster that went off the air in April 2016.
“My family’s roots are in the entertainment business and I guess we are emotionally attached to this industry,” Chiu said. “Mr Cheng and I have known each other for a long time, and it only took 10 minutes for us to reach the agreement to invest.”
The future of the beleaguered pay-television provider had been up in the air since last month when its parent company Wharf said it would cease funding it, as the broadcaster had grappled with steep losses for several consecutive years.
Tam Tsz-wang, media and technology analyst at brokerage DBS Vickers, said mainland firms were keen to invest in Hong Kong media outlets thanks partly to their good reputation accumulated over decades.
“When increasing numbers of mainland companies are looking for overseas investment opportunities, Hong Kong’s media sector has drawn their special attention,” he said.
While Chiu controls roughly 25 per cent of the consortium, called Forever Top, a combined 46 per cent stake is held by Henry Cheng, the eldest son of late tycoon Cheng Yu-tung, and his family-owned conglomerate Chow Tai Fook Enterprises. The Cheng family is the third richest in the city.
Other backers include Guangzhou R&F Properties chairman Li Sze-lim, John Zhao Huan, who oversees mainland tech titan Legend Holding’s private equity unit, Hony Capital.
With the backing of mainland capital, Tam said there might be a shift in content by local media, including producing more programmes to attract a mainland audience.
“The Hong Kong market is too small,” he said. “It is normal that media bosses would want to create synergies between local media content and their mainland business.”
Chiu attempted to dismiss concerns that mainland capital will dampen the broadcaster’s neutrality, saying that “nearly every tycoon in the city has business interests in the mainland.”
“In the coming five years, we expect to pour HK$3 to HK$4 billion into the company,” he said. The money will be mainly channelled into TV productions, construction of new plants and new equipment.
“As an international financial centre, Hong Kong needs to have a powerful financial news channel,” Chiu said. “Internet streaming is an area the company needs to improve to meet the demands of the community and to enable easy access by a greater audience base.”
The government will “cautiously consider” i-Cable’s application to renew its soon-to-expire licence, the city’s commerce secretary, Greg So, told reporters on Friday.