TVB pays $27.5 mil for Pay

HK broadcaster reinvests in loss-making pay platform

HONG KONG -- Television Broadcasts, Hong Kong's leading commercial broadcaster, will pay HK$213 million ($27.5 million) for 31% of TVB Pay Vision, a loss-making pay-TV platform.

It is buying the shares from See Corp., a media mini-conglomerate with interests in talent management, music production and event promotions, which originally bought 49% of the platform in August 2005 for $43.5 million.

Following the deal TVB will own some 60% and once again become the largest shareholder in TVB Pay, while See will retain an 18% stake.

In 2007 TVB cut its stake in TVB Pay, selling a 20% stake to investment company Gemstone. A restructuring in 2008 subsequently cut TVB's voting control of TVB Pay to just 15%, allowing the free-to-air broadcaster to escape firewall conditions previously imposed on it by the sector regulator, the Broadcasting Authority.

TVB Pay distributes 43 channels including eight TVB-branded specialty channels, as a direct-to-home satellite service. Smaller numbers of its channels are carried on Hong Kong's two substantially bigger pay-TV platforms; PCCW's IPTV-based Now TV, and conventional cable company I-Cable. It also operates satellite uplink and playout services.

TVB Pay's losses in 2007 totaled $35.2 million and shaded down to $28.1m in 2008. Its net liabilities at the end of December were $63.6 million.

See will enjoy a profit of $21.4 million on the stake sale, although it may have to provide TVB a 'shareholders loan' of $1.3 million.

The deal is subject to regulatory approval from the Broadcasting Authority, something which See said could take until November to secure.
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