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Fast death or a slow rot? i-Cable shareholders call the shot

In quitting i-Cable Communications, Wharf Holdings has handed over to minority shareholders to decide whether they will accept a white knight rescue

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Hong Kong broadcasters as is the traditional media industry are under increasing pressure to survive with the onslaught of online media vying for the same advertisement dollars and the overwhelming volume of contents available 24/7 for consumers to choose from. Photo: Felix Wong
Eric Ng

Minority shareholders of i-Cable Communications have been handed the unenviable task to decide on Monday the fate of Cable TV Hong Kong, the city’s first cable television broadcaster, amid the cloud of uncertainty over an industry struggling to transition.

They will be asked in an extraordinary shareholders meeting to approve or reject the execution of various agreements to pave for the exit of current majority shareholder Wharf Holdings and the entrance of a white-knight consortium, along with a shares subscription offer to raise net proceeds of HK$669 million.

Wharf, which owns 73.8 per cent of i-Cable, has decided to throw in the towel after nine years of bleeding at the broadcaster, which includes Cable TV’s nascent sister free-to-air Fantastic Television station. Last year’s net loss amounted to HK$313 million, steepened from HK$233 million in 2015.
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Wharf, which announced in March it will no longer pump in more money into the company, will not be allowed to vote on the funding-raising proposal at the EGM under securities regulation as it is an interested party to some of the agreements.

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Fantastic TV, launched last month has met with negative response from consumers. Wharf is now passing on to i-Cable minority shareholders to call the shot on whether to accept the white knight consortium bail out on Monday’s EGM. Photo: Edward Wong
Fantastic TV, launched last month has met with negative response from consumers. Wharf is now passing on to i-Cable minority shareholders to call the shot on whether to accept the white knight consortium bail out on Monday’s EGM. Photo: Edward Wong
Small shareholders are left to decide on the company’s future. It does not look like they have much choice than to approve the plan that comes with a rights issue at a 66 per cent discount to the closing price right before the plan was unveiled.

“There isn’t any viable alternative on the table,” said Kenny Tang Sing-hing, chief executive of Junyang Securities. “If they say no to the funding plan, the pay TV business may not be able to continue and the company will not be able to fund the development of the free TV business.

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