Hong Kong’s troubled pay TV operator i-Cable sees shares plunge as it gives rejected funding plan a second go
- The stock slumped 7.8 per cent to 10.6 Hong Kong cents at Monday’s close, the steepest decline since November 12
Shares of troubled i-Cable Communications, Hong Kong’s biggest pay TV operator, tumbled the most in 11 weeks after the firm revived a fundraising plan to place new stocks with investors.
The stock slumped 7.8 per cent to 10.6 Hong Kong cents at Monday’s close, the steepest decline since November 12. About 26.5 million shares changed hands, almost three times the three-day average, according to data compiled by Bloomberg. The sell-off came after shareholders rejected a similar rights-issue plan about two weeks ago.
i-Cable said in an exchange filing over the weekend that it planned to raise as much as HK$660 million (US$84.1 million) by selling new shares and long-term convertible bonds. That compared with the HK$691.7 million it was seeking to raise from the previous proposal that was vetoed because of concerns about its diluting effect on earnings.
“The board has revised the previous proposal to try, as far as possible, to balance the undoubted need for increased equity capital with the concerns of the independent shareholders,” i-Cable said in the filing. “This is the amount the board considers necessary to achieve financial stability, maintain customer confidence and fulfil the group’s licensing requirements.”
This time i-Cable plans to raise up to HK$465.5 million from the rights offer, which would involve selling three new shares for every four existing ones, and float at least HK$185 million in long-term convertible bonds to controlling shareholder Forever Top (Asia), according to the filing. The placement stocks would be offered at 10 Hong Kong cents, representing a 5.7 per cent discount to i-Cable’s Monday closing price.
i-Cable has lost more than 80 per cent of its market value over the past decade, as it has grappled with financial woes. It has reported losses for 10 consecutive years, losing an aggregate HK$2 billion, according to the company’s chief financial officer.
Business has shown no signs of picking up even after Forever Top injected HK$1billion in cash last year after taking i-Cable over from Wharf Holdings.
i-Cable signed an agreement with Guangdong Cable TV Network this month in a bid to turn things around by tapping 14 million viewers in the southern Chinese province. Under the pact, programmes produced by the Hong Kong TV operator will be aired in mainland China.
