Hong Kong's Wharf Holdings has announced it will stop providing funding for its unprofitable pay TV and broadband business i-Cable Communications, and may wind down the company.
Wharf has been trying to find a buyer for its 73.8% stake in i-Cable but has been unable to find any takers, the South China Morning Post reported.
Now the company plans to stop providing funding for i-Cable, which recorded a HK313 million loss last year.
Unless an alternative source of funding can be found, this is likely to lead to the company's closure, because its pay TV license is due to mature on May 31 and the Office of the Communications Authority has instructed i-Cable to meet its financial responsibilities before this time or forfeit its license.
But according to the report, i-Cable still has access to up to HK$400 million in funds allocated from Wharf Finance late last year. The company plans to hire a financial advisor to review its strategy for the future, before deciding whether to continue operations.
Wharf Holdings also sold its fixed line telecommunications business Wharf T&T in October to a private equity consortium for HK$9.5 billion. The divestment or exit from i-Cable would represent a complete withdrawal from the telecommunications, media and entertainment segments.