New World Development's Henry Cheng gains control of i-Cable Communications

New World Development chairman Henry Cheng Kar-shun has gained control i-Cable Communications after increasing his stake in a consortium that controls the company as unveiled by stock exchange filings. 

Stock exchange filings showed that Cheng's wholly-owned Celestial Pioneer reached two agreements with certain undisclosed minority shareholders of Forever Top (Asia) to conditionally buy a 40.5% interest on 30 September. Following which, Cheng will own at least 72% interest when the transaction completes together with an existing stake held by Celestial Pioneer. i-Cable Communications was pending the release of an announcement of inside information of the company potentially involving the Hong Kong Code on Takeovers and Mergers. On Monday, its shares were suspended from trading in the morning before the market opened. 

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.

Meanwhile, a spokesperson from the company on Wednesday clarified that the company had no plan in retreating from the pay TV market despite the fact that in the past year, it showed signs of volatility. In December last year, it laid off or reassigned about 100 employees in order to survive amid the economic downturn caused by the pandemic. 

However, in its latest annual report, the company said its free TV business Open TV had witnessed revenue growth with huge demand of airtime sales during the year ended on 31 December 2020, adding that the introduction of new sales initiatives and diversified advertising solutions led to an increase in sales in digital and social media platforms. Also, one of the group’s major sources of revenue in the telecommunications segment was generated from various collaborations with CMHK such as content, network consultation and mobile business. 

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