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UPDATE 1-HK pay TV firm i-CABLE's shares dive as parent Wharf ends backing
March 10, 2017 / 5:43 AM / 6 months ago

UPDATE 1-HK pay TV firm i-CABLE's shares dive as parent Wharf ends backing

* Wharf says won’t renew funding commitment to i-CABLE

* Examining all options, including discontinuing i-CABLE ops

* i-CABLE shares tumble as much as 46 pct, a record intraday (Recasts with Wharf’s comments, updated stocks prices and background)

HONG KONG, March 10 (Reuters) - Hong Kong property-to-media conglomerate Wharf (Holdings) is halting funding to its loss-making pay TV and broadband internet subsidiary i-CABLE Communications and will examine all options, including shutting it down, after failing to sell it.

Wharf’s announcement, made after market hours on Thursday, sent i-CABLE shares down as much as 46 percent on Friday morning, before erasing some of the losses to be down 35 percent at midday. It was i-CABLE’s biggest ever intra-day fall on record. Shares of parent Wharf jumped as much as 10 percent.

Wharf said it wouldn’t provide further financing to i-CABLE on expiry of the current commitments of up to HK$400 million ($51.5 million), and had no intention to increase its near 74 percent stake in the firm. i-CABLE posted its ninth straight year of loss in 2016.

“The chances to see it turning into a profit-making business are low in the short to medium run,” Wharf chairman Stephen Ng told a results conference late on Thursday. Wharf is a unit of Hong Kong developer Wheelock and Co Ltd.

Amid previous reports Wharf had tried to spin off the business, it said it hadn’t entered into any agreements with potential buyers and had now terminated all discussions regarding sales of i-CABLE.

Ng, who is also chairman of i-CABLE, said external advisers would be engaged to explore alternative sources of funding for i-CABLE, advise on its business reorganisation, as well as continuance, directions and discontinuance of its business operations.

With a current market value of about $158 million, i-CABLE saw its net loss widen to HK$313 million in 2016 from a HK$233 million loss in the previous year. Revenue from television fell 8 percent while internet and multimedia revenue was down 4 percent. Wharf saw its 2016 core profit rise 25 percent.

i-CABLE has been a popular pay television service provider in the city of 7.3 million since 1993, providing a mix of local and international news, sports and entertainment channels, including some of its own original content.

It also runs a respected news service, Cable News, that has a reputation for quality and independent journalism, including critical reports on China through the years.

Hong Kong media operators, though, have been struggling in past years with both Television Broadcasts and Asia Television attracting a number of bidders over time, but the latter shut down last year.

i-CABLE’s pay TV licence will expire on May 2017, and it said the government has agreed to grant a new licence for 12 years. ($1 = 7.7653 Hong Kong dollars) (Reporting by Donny Kwok; Editing by James Pomfret and Muralikumar Anantharaman)

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