ATV likely to avoid liquidation as Chinese company takes majority stake, pays HK$2.2 billion debts
But embattled broadcaster must still resolve HK$24 million owed to TVB
In a new twist to the sorry drama of Hong Kong’s now-defunct Asia Television (ATV), the company is likely to avoid going into liquidation as a mainland China-based “white knight” has successfully acquired its majority stake and resolved its major debts totalling about HK$2.2 billion.
However, the embattled firm still needs to resolve its remaining smaller debts with other creditors including a debt of HK$24 million owed to Television Broadcasts (TVB), before it can enjoy a new lease of life for further development.
The latest development came as new investor Star Platinum Enterprises already resolved the firm’s debt of HK$2.1 billion owed to former major shareholder Wong Ching.
Star Platinum, a subsidiary of publicly listed mainland-based firm Co-Prosperity Holdings, earlier completed the purchase of a 52.42 per cent stake in ATV via a deposit payment of HK$500 million to Wong with other undisclosed terms.
The debts of about HK$35 million in unpaid wages to 640 former employees and HK$18 million of Insolvency Fund were also paid.
The deal has made Star Platinum the majority shareholder of ATV, the city’s oldest TV station. ATV ceased broadcasting on April 1 last year after its free-to-air licence expired, following years of financial and managerial turmoil.
As the new investor is to launch a debt restructuring plan for ATV, the High Court on Monday halted its liquidation proceedings and removed accounting firm Deloitte from its role as the firm’s provisional liquidator.
Derek Lai, vice-chair of Deloitte China, said on Tuesday that since Star Platinum had already resolved the major debts ATV incurred, it was unlikely the TV company would go into liquidation despite still owing smaller debts to other creditors including TVB.
“Star Platinum needs to negotiate with the remaining creditors,” he said. “I hope they will support its restructuring with ATV.”
He added that ATV now had a cash flow of HK$10 million to be paid to other creditors as well as assets worth over HK$40 million, including a production facility in Tai Po and other equipment.
In its latest financial report last month, Co-Prosperity said the deal with ATV could help the group diversify its business. Apart from the entertainment industry, the group focuses on fabric and clothing trading, money lending and securities investments.
“ The directors believe that the potential intrinsic value of ATV can be realised if the plan to rescue ATV is successful,” the report said.
The group said it could make use of ATV’s remaining assets and turn the broadcaster into a production house in Hong Kong.
“The group has been granted access and usage of certain assets of ATV which shall enable ATV to continue to operate and act as a production house in Hong Kong taking advantage of its 50,000 square-metre production facility, and its film library and archives,” it said.