Hong Kong tech company proposes HK$500 million lifeline for embattled broadcaster ATV

A listed Hong Kong tech company is proposing to extend a lifeline of up to HK$500 million in loans to rebuild ATV and develop the embattled station’s online television business. A separate sum of HK$300 million in loans from another firm is also in the pipeline.

In a statement posted late Tuesday night on the Growth Enterprise Market and Hong Kong Exchanges and Clearing, China Trends Holdings, an ATV creditor, said it wanted to “inject” its web-based interactive TV platform into the debt-laden station and turn it into an “internet TV business with e-commerce media characteristics”.

But ATV staff representatives were not keen on the offer, saying the twists and turns at the dying station had left employees reeling and uncertain about their futures.

The fate of the company remains up in the air following the latest dispute between its court-appointed provisional liquidator Deloitte and mainland investor Si Rongbin. Both sides accuse the other of breaching terms and conditions of the last-minute deal meant to keep the ailing station on life support until April 1.

Despite plans by some of ATV’s creditors to keep the company alive even after its TV licence expires next month, it was unclear whether Wong Ching – who claims he is owed HK$1.8 billion after an incomplete deal when he sold his stake in the station to Si – would be persuaded to withdraw the petition he filed for winding up the 59-year-old broadcaster.

The petition is set for a hearing on April 13.

According to winding-up procedures in Hong Kong, a firm may negotiate with its creditors in order to reach a compromise and avoid its being wound up.

Meanwhile, the Communications Authority said Deloitte had yet to make a formal reply to the media watchdog’s inquiry about the current situation of ATV.

Shareholders of Hong Kong-based investment holding company Co-Prosperity yesterday passed resolutions allowing the group to provide a loan of HK$300 million for China Culture Media, which is controlled by Si.

China Trends pitched two proposals, either of which it said would pay ATV the cash it needed to recover the costs of liquidation and pay staff outstanding wages in exchange for a controlling stake.

In the first proposal, 30 per cent of profits generated by the station would be used to repay the principal of the debts, with interest waived, owed to all creditors.

“The company agrees to provide a secured and interest-free loan of an amount up to HK$500 million to ATV for its new start-up, which shall be secured by way of a debenture creating a fixed and floating charge over all the assets of ATV,” China Trends chairman Xiang Xin, a mainland tech entrepreneur, said.

The second proposal would convert the debt into ATV share capital. While a loan of up to HK$500 million would also be provided, it would need to be repaid with interest.

China Trends noted that the station still had useful assets, including “legitimate landing rights of programme in the Pearl River Delta region”.

China Trends, with a market capitalisation of about HK$1.1 billion, did not mention whether it would raise funds from the market to provide the HK$500 million loan.

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