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Hong Kong pay-TV leader i-Cable taps main shareholder for more funds to help end decade of losses
- Company is selling HK$200 million of convertible bonds with 2 per cent annual coupon to replenish its capital for investment
- i-Cable is required to invest HK$3.45 billion from 2017 to 2023 on infrastructure, contents under its operating concession
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Hong Kong’s biggest pay-TV operator i-Cable Communications is turning to its key shareholder again for cash to help turn around its business and compete with well-funded home rivals.
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The firm is selling HK$200 million (US$25.8 million) worth of convertible bonds to Forever Top Limited, its controlling shareholder with a 43.2 per cent stake, according to a stock exchange filing. The 10-year securities will pay 2 per cent coupon annually, and may be converted into ordinary shares at HK$0.068 each, a 13.3 per cent premium over its last-traded price.
Forever Top is owned by five parties, including its chairman David Chiu, billionaire Henry Cheng Kar-shun, Chow Tai Fook Enterprises and John Huan Zhao of private equity firm Hony Capital.
i-Cable has been losing money for at least a decade, competing with the likes of 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.
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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.
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