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Friday, April 21, 2017, 16:41

I-Cable gets lifeline in share sale backed by Henry Cheng

By Bloomberg
I-Cable gets lifeline in share sale backed by Henry Cheng
Chow Tai Fook Enterprises Ltd and its billionaire Chairman Henry Cheng, Far East Consortium Chairman David Chiu, Guangzhou R&F Properties Co Chairman Li Sze Lim, and Hony Capital President John Huan Zhao will underwrite i-Cable offer. (Provided to China Daily)

I-Cable Communications Ltd, the Wharf Holdings Ltd cable TV unit that's lost more than a third of its market value since early March, plans to raise HK$704 million (US$91 million) in a sale of new shares at about one-third of the stock's market price. The stock fell the most in more than a month in Hong Kong trading.

Chow Tai Fook Enterprises Ltd and its billionaire Chairman Henry Cheng, Far East Consortium Chairman David Chiu, Guangzhou R&F Properties Co Chairman Li Sze Lim, and Hony Capital President John Huan Zhao will underwrite the offer, the company said in a statement Friday. The offer will leave the underwriter group with about 46.2 percent of I-Cable if all shares are taken up by qualifying holders and about 62.5 percent if holders don't take up the offered stock.

The offer will leave the underwriter group with about 46.2 percent of I-Cable if all shares are taken up by qualifying holders

I-Cable shares plunged as much as 25 percent to HK$0.46 before trading at HK$0.51 as of 9:32 a.m. in Hong Kong, dragging down the pay-TV system operator's market value to about HK$1 billion. Trading had been suspended as of April 18 pending an announcement.

Wharf Holdings Ltd said in a March 9 statement that talks to sell the company to potential buyers have stopped and that the parent would discontinue providing funds to I-Cable beyond the money already committed. Wharf said it planned to hire external advisers to explore options including whether to discontinue I-Cable's operations, reorganize the business or find alternative sources of funding.

I-Cable has posted nine straight annual losses amid a slump in revenue from subscriptions and advertising, coupled with intensifying competition from Netflix-like streaming services. The company, which boasted a market capitalization of more than HK$30 billion in 1999, has since lost more than 95 percent of its value.

 
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