i-Cable Communications to announce takeover deal

i-Cable Communications is planning to unveil a takeover deal according to its stock exchange filing on Monday. Its shares were suspended from trading in the morning before the market opened. The company issued a statement on 5 October, which stated that the company was pending the release of an announcement of inside information of the company potentially involving the Hong Kong Code on Takeovers and Mergers. 

According to a report from the South China Morning Post, i-Cable Communications is likely to announce new shareholders or consolidation with other companies to finance its future expansion, as pay-TV and other media businesses in Hong Kong have been struggling as there were a lot of competitors in the market. The company is required to spend HK$3.45 billion between 2017 and 2023 in capital investment and programming content under a concession that runs until May 2029. Its TV business rivals include HKT's nowTV and PCCW's ViuTV, while it also competes with a number of broadband operators such as Hong Kong Broadband Network. 

Earlier this year in January, the company sold HK$200 million worth of convertible bonds to Forever Top owned by a consortium led by its chairman David Chiu Tat-cheong, New World Development's Henry Cheng Kar-shun, Chow Tai Fook Enterprises, and John Huan Zhao of private equity firm Hony Capital. Forever Top is a controlling shareholder with a 43.2% stake. The consortium took control of i-Cable in 2017 as its former majority shareholder Wharf refused to inject more fresh capital into the company. Afterwards, Wharf decided to exit from the pay-TV operator after it had made losses over 10 consecutive years totalling about HK$2 billion. The sold of convertible bonds to Forever Top earlier this year was the fourth time the firm had tapped its owners to survive over the past two years to. 

However, the company believed that part of its business was improving, as the advertising revenue of the free television channel, Hong Kong Open TV , increased by approximately 61% over last year. Although the MTR Corporation In-Train TV had not achieved significant growth due to the impact of COVID-19, the company believed that when the pandemic is under control, this operation will make positive contributions.

In December, i-Cable laid-off or reassigned some of its staff due to COVID-19 induced pressures. The company wich was founded in 1999 provides broadband internet and pay-TV services and competes with the likes of Now TV, Viu TV and Hong Kong Broadband Network .

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