I-Cable Tumbles by Record After Wharf Warns End of SupportBloomberg News
Shares of I-Cable plunge as much as 46% in Hong Kong
Wharf scraps sale, won’t pump new funds into pay-TV business
I-Cable Communications Ltd. plunged by the most ever in Hong Kong trading after its parent decided to scrap plans to sell the unprofitable pay-TV operator and stop pumping new funds into the unit, putting the company’s future in doubt.
I-Cable tumbled 34 percent, the biggest decline since the stock started trading in 1999, to close at HK$0.61 on Friday. Wharf Holdings Ltd. said in a statement Thursday after the market close that talks to sell the company to potential buyers have stopped and that the parent would discontinue providing funds to I-Cable beyond the money already committed.
Wharf, which on Thursday reported a 25 percent jump in full-year earnings and said it has begun exploring a listing of some of its investment properties, rose 8.7 percent in Hong Kong, the most since October 2011. The firm, Hong Kong’s largest retail landlord by sales, benefited from an increase in sales at malls including Harbour City in Tsim Sha Tsui.
Wharf plans to hire external advisers to explore options including whether to discontinue I-Cable’s operations, reorganize the business or find alternative sources of funding, it said.
“It’s impossible for Wharf to withstand its support of I-Cable due to the segment’s financial loss,” Raymond Cheng, an analyst at CIMB Securities Ltd. in Hong Kong, said by phone. “But it’s too early to predict that I-Cable will be closed. The financially-unsound business may not be attractive to potential investors, but a television license may appeal.”
I-Cable has posted nine straight annual losses amid a slump in revenue from subscriptions and advertising, coupled with intensifying competition from Netflix-like streaming services. The company, which boasted a market capitalization of more than HK$30 billion ($3.9 billion) in 1999, has since lost more than 90 percent of its value.
— With assistance by Prudence Ho, and Emma Dong