i-Cable Communications, Hong Kong’s second-biggest pay-TV operator, set to announce takeover deal
- i-Cable’s shares were suspended from trading in the morning before the market opened, pending an announcement
- It is likely to announce new shareholders or consolidation with other companies to bring in money to finance its future expansion, according to a broker
i-Cable’s shares were suspended from trading in the morning before the market opened, pending an announcement “potentially involving the Hong Kong Code on Takeovers and Mergers”.
i-Cable is required to spend HK$3.45 billion (US$443 million) between 2017 and 2023 in capital investment and programming content under a concession that runs until May 2029, according to an earlier stock exchange filing.
Founded in 1999, i-Cable provides broadband internet and pay-TV services. It competes with rivals such as Now TV, Viu TV and Hong Kong Broadband Network in a city of 7.5 million people. i-Cable had 754,000 pay-TV subscribers as of June 2020, giving it a 38 per cent share of the market, according to its 2020 interim report and data from the Office of the Communications Authority.
Forever Top is owned by a consortium led by its chairman David Chiu Tat-cheong, New World Development billionaire Henry Cheng Kar-shun, Chow Tai Fook Enterprises and John Huan Zhao of private equity firm Hony Capital.
The consortium came in as a white knight and took control of i-Cable in 2017 after its former majority shareholder Wharf (Holdings) refused to inject any more fresh capital into the company. Wharf decided to exit from the pay-TV operator after it had made losses over 10 consecutive years totalling about HK$2 billion.
Chiu is chairman of property developer and hotelier Far East Consortium International and the second son of the late Deacon Chiu Te-ken. Both Deacon Chiu and New World Development’s Cheng were investors in free television broadcaster ATV during its heyday in the 1980s and 90s. ATV was forced to go off-air in April 2016 after 59 years, as funding dried up after numerous years of losses.
In December, i-Cable laid-off or reassigned some 100 staff in a bid to survive the economic downturn sparked by the Covid-19 pandemic.
The company’s shares price last closed in Hong Kong on Thursday at 6.8 HK cents, down 27 per cent over the last three months but up by 8 per cent this year.