Pay-television provider i-Cable Communications has been rescued by a consortium of white knights led by property businessman David Chiu Tat-cheong, who plan to use the broadcaster as a base on which to build a new media company.
In a statement late on Thursday, Forever Top said it had agreed on a deal with i-Cable’s parent, Wharf (Holdings), for an equity injection of HK$1 billion to strengthen the broadcaster’s financial position. An equity injection is when you insert equity, or stocks and shares, in the form of cash to lower debt or to encourage growth.
“Upon completion of the transaction, Forever Top will use i-Cable as the platform to drive its media business,” Chiu said in the statement.
“Hong Kong has been known as Hollywood of the Orient and I believe television talent are plentiful here.” The statement on to say that Chiu hopes these talents will be given the chance to shine with i-Cable.
He also said Forever Top would try to strengthen the extent of financial news in the region as well.
Last year, i-Cable made a loss of HK$313 million and Wharf had said it would stop funding the broadcaster and exit the business of providing pay television and broadband internet.
Chiu said with the equity injection of HK$1 billion, the outlook of i-Cable would be significantly improved, with “increased equity, reduced debt and possibly expanded services”.
Other backers of the consortium include New World Development chairman Henry Cheng Kar-shun, Guangzhou R&F Properties chairman Li Sze-lim, John Zhao Huan, president of Hony Capital, and Chow Tai Fook Enterprises.
Chiu is the second son of Deacon Chiu Te-ken, who founded ATV, the free-to-air broadcaster that went off the air in May 2016.
Forever Top, which had previously applied for a free-television licence, said in the statement that it had asked the Communications Authority put on hold the processing of this application until the outcome of the equity injection into i-Cable became clearer.
The injection plan will require approvals from the independent shareholders of i-Cable, the Securities and Futures Commission, the Hong Kong stock exchange and the Communications Authority.
Forever Top said it hoped the deal would be completed in September.