Hong Kong’s Executive Council (Exco) has decided not to renew ATV’s free-to-air television broadcast license which will expire in November this year, a top government official said on Wednesday.
Gregory So Kam-leung, Secretary for Commerce and Economic Development, said the financially troubled ATV is being given a 12-month notice period, allowing it to operate only until April 1, 2016.
The decision came at a meeting held today by the Executive Council, a top-level body that is tasked with assisting the city’s chief executive in policy-making.
At the same meeting, authorities decided to grant a 12-year free-to-air TV license to Hong Kong Television Entertainment Co. Ltd., which is a subsidiary of PCCW Ltd. (00008.HK), according to So.
The license will be effective from today, the official said.
HKTE will launch a 24-hour Cantonese channel over the next 12 months and a 16-hour English channel over the next 24 months, Communications Authority chairman Ambrose Ho Pui-him said in the same media briefing.
Over the next six years, HKTE is expected to invest at least HK$1.38 billion for its services, Ho said.
Wednesday’s decisions by the Executive Council came amid conflicting reports and confusion over the possible entry of a new investor in ATV.
An ATV news report said late Tuesday that the firm’s major shareholders, Wong Ching and Wong Ben Koon, have agreed to sell their stakes to Hong Kong Television Network (HKTV, 01137.HK) chairman Ricky Wong Wai-kay.
However, HKTV said in a stock exchange filing Wednesday that its chairman has not reached any agreement with anyone regarding the acquisition of ATV. It confirmed that Ricky Wong met Wong Ching once on March 26, but said there has been no deal.
Ricky Wong had earlier sought a free-to-air TV license, but his bid was rejected by the Hong Kong government in 2013.
Meanwhile, Derek Lai Kar-yan, ATV’s agent and Deloitte China’s Southern Region managing partner, said Wednesday afternoon that Wong Ching and Wong Ben Koon signed a contract at 11 am for sale of the cash-strapped broadcaster.
He, however, did not reveal the identity of the buyer. The deal will be completed in a month only if ATV manages to win license renewal from the government, Lai said.
Lai said he was not authorized to disclose the identity of the buyer, but he showed some transaction documents that mentioned “AID Partners” (08088.HK).
AID Partners, formerly called Crosby Capital, bought Hong Kong and Singapore operations of HMV Retail Ltd. in 2013 from Britain’s HMV Group. The company is currently controlled by its founder and chief executive Kelvin Wu.
Disclosure: PCCW is controlled by Richard Li Tzar-kai, who owns the Hong Kong Economic Journal, the parent of EJ Insight.
– Contact us at [email protected]