Taiwanese tycoon to take stake in ATV
'Rice cracker king' offers lifeline
Taiwanese billionaire Tsai Eng-meng has agreed to inject funds to shore up the finances of loss-making Asia Television, triggering changes in the broadcaster's shareholding structure, according to informed sources.
Mr Tsai, whose net worth is estimated by Forbes at US$2.6 billion, signed a preliminary agreement last week to become a substantial shareholder of Alnery, a company that controls 47.58 per cent of ATV.
Alnery is jointly owned by Payson Cha Mou-sing's family, ATV's dominant stakeholder, ABN Amro and former ATV chief executive Louis Page.
Mr Tsai and his family are believed to have bought ABN Amro's stake in Alnery, and the deal is believed to be worth several hundred million Hong Kong dollars, according to the sources.
In 2007, the Cha family and ABN Amro injected HK$800 million into ATV and became its dominant shareholders. The Cha family also owns another 10.75 per cent stake in ATV through Panfair, with the remaining shares held by Phoenix TV chairman Liu Changle, businessman and former ATV chief executive Chan Wing-kee, and mainland conglomerate Citic Group.
Multiple sources have confirmed that fresh capital is being brought in to sustain ATV through changing the shareholding structure of Alnery, in particular the ABN Amro stake.
Sources said Alnery had two kinds of shares, voting and non-voting, to ensure the Cha family held more than 51 per cent of voting control over the company, even though the other shareholders may have contributed more capital.
As the changes in Alnery's shareholdings brought about by Mr Tsai's investment would not change the Cha family's overall controlling stake in ATV, they would need only simple administrative approval by the Broadcasting Authority.
No approval by the Executive Council would be required as the changes would not involve non-local parties taking a controlling stake or breaches to cross-media ownership rules, sources said.
Mr Tsai, dubbed the 'king of rice crackers', is chairman of Hong Kong-listed Want Want China Holdings, the largest maker of rice crackers and flavoured drinks on the mainland. However, he is believed to have made the ATV investment through a holding company wholly owned by his family.
Mr Tsai's investment would provide critical funding to sustain the operations of ATV as the local broadcaster needs about HK$1 billion to keep going for the next three years.
An ATV spokeswoman said she was not aware of any new shareholding restructuring.
There have been reports that the broadcaster is losing up to HK$2 million a day.
ATV executive chairman Linus Cheung Wing-lam earlier this month denied the broadcaster was losing that much, but admitted it was facing financial difficulties and that finding new advertising revenues amid the global economic crisis was a challenge.
The Cha family has reportedly been seeking new cash since last summer to shore up the finances of ATV as other shareholders were unwilling to put up more money.
Earlier this month, Mr Cheung said the Cha family had made progress in sorting out ATV's finances and simplifying the shareholding structure, expressing confidence that the funding issue would be resolved in the near future.
