Hong Kong’s top station TVB gets nod to sell minority stake to finance firm as it seeks funds for new productions

Hong Kong’s communications watchdog has given the city’s biggest free-to-air broadcaster, TVB, approval to sell a minority stake to a financial firm as part of an exercise to raise HK$109.4 million (US$14 million) for new productions.

The Communications Authority said on Tuesday that it had approved an application by the broadcaster to allot 8.7 million new shares at HK$3.36 each to GF Global Capital, a Hong Kong investment trading company, for HK$29.4 million.

GF Global’s ultimate parent is GF Securities, a financial firm with investment banking and wealth management services, which is listed in Hong Kong and Shenzhen.

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“In approving the application, the authority is satisfied that after completion of the shareholding changes, TVB will continue to comply with all applicable regulatory requirements ... and be able to honour the investment and programming commitments it has made under its licence,” it said.

In an announcement on May 13, the broadcaster said it had struck a deal with GF Global to sell the minority stake, which represented about 2 per cent of the total number of issued shares or 1.96 per cent of the enlarged share capital, pending shareholders’ approval.

At HK$3.36 per share, the sale meant a 9.92 per cent discount to the last traded price of HK$3.73 on May 13. The stock closed on Tuesday 1.86 per cent lower at HK$3.69.

In a separate deal, the broadcaster will issue 20 million new shares to its biggest shareholder, Shaw Brothers Limited (SBL), at HK$4 per share, marking a 7.24 per cent premium to the last traded price.

The new shares represented about 4.56 per cent of the total number of issued shares or 4.36 per cent of the enlarged share capital.

The two deals will raise HK$109.4 million, which TVB intends to use for general corporate purposes, including working capital for drama co-productions with mainland Chinese streaming platform partners.

TVB chairman Thomas Hui has expressed optimism that the broadcaster will return to profit. Yik Yeung-man

Earlier this year after signing an expanded drama co-production partnership agreement with mainland video-streaming platform Youku, TVB said it expected to commence filming and production of 10 shows in the second half of 2024.

It said production of such a quantity of dramas would also require incremental working capital in the initial stages.

“The company also believes that it is prudent to raise additional shareholders’ capital ... to ensure the group’s overall liquidity level remains healthy throughout,” it said.

With a shift in the audience’s appetite and competition from other modes of media in recent years, the free-TV industry has faced tough times. TVB’s six straight years of losses including three years during the Covid-19 pandemic partly reflects that.

But TVB chairman Thomas Hui To earlier expressed optimism that the broadcaster would return to profit in the second half of the year.

In 2023, the broadcaster’s net loss was 5.5 per cent lower at HK$763 million (US$97.8 million) than the previous year.

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