Rights issue plan sends i-Cable into a tizzyTop News | Samantha Wong 13 Nov 2018
Shares of i-Cable Communications plunged 30 percent to 12.5 HK cents yesterday after the television and telecom service provider announced a rights issue aimed at raising as much as HK$690 million.
The loss-making company said it plans to issue shares at 10.9 HK cents each - a discount of almost 40 percent compared with the closing price of 19.2 HK cents on Friday.
The controlling shareholder of i-Cable, Forever Top, led by real estate tycoon David Chiu Tat-cheong, said it will buy all unsold shares.
Chiu is also the chief executive of developer Far East Consortium.
Forever Top holds 43.2 percent of i-Cable's issued shares, a filing to the stock exchange said.
i-Cable said about half of the proceeds, HK$350 million, will be used to acquire channels and programs, as well as to invest in self-produced shows.
A small sum will be used for enhancement of network infrastructure and upgrading broadcasting equipment.
i-Cable, which reported a loss of 4.1 HK cents per share during the six-month period to June 30, said it aims to restructure the company through cost saving and new content and channels.
It also said it is evaluating forming partnerships or disposing of loss-making operations to reduce the cash drain.
In September last year, Wharf sold i-Cable to Forever Top after it struggled to make a profit.