TELEVISION BROADCASTS LIMITED Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the content of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.
(Incorporated in Hong Kong with limited liability)
Stock Code: 00511 INSIDE INFORMATION
This announcement is made by the Company pursuant to Rule 13.09(2)(a) of the Listing Rules and the Inside Information Provisions under Part XIVA of the SFO.
The Board wishes to announce that an impairment loss of approximately HK$654 million representing 100% of the Company's net interest in TVB Network Vision, an associate engaging in Hong Kong pay TV business, has been booked during the six month period ended 30 June 2015.
The Board further wishes to remind that a gain (which included fair value gain on the retained interest) in respect of the sale of the 53% shareholding in Liann Yee, in the amount of approximately HK$1,396 million, as disclosed in the Company's announcement on 29 January 2015, has also been booked during the same period.
Shareholders of the Company and potential investors are advised to exercise caution when dealing in the securities of the Company.
T h i s a n n o u n c e m e n t i s m a d e b y Te l ev i s i o n B r o a d c a s t s L i m i t e d ( t h e "Company" or "TVB", together with its subsidiaries, collectively, the "Group") pursuant to Rule 13.09(2)(a) of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the "Listing Rules") and the provisions of Disclosure of Inside Information (the "Inside Information Provisions") under Part XIVA of the Securities and Futures Ordinance (Chapter 571 of the laws of Hong Kong) (the "SFO").
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The Board of Directors of the Company (the "Board") wishes to announce that based on a preliminary assessment of the carrying value of the Company's net interest in the Hong Kong pay TV business, carried on through an associate TVB Network Vision Limited ("TVB Network Vision"), has been significantly impaired in the amount of approximately HK$654 million, representing 100% of the amount of the Company's net interest (comprising cost of investment, loan and trade receivables less amounts of losses shared) in TVB Network Vision. This amount has been booked in the profit and loss account of the Company during the six month period ended
30 June 2015.
The Hong Kong pay TV business commenced operation in 2003 which is being operated through TVB Network Vision, an associate of the Company. Over the years, TVB Network Vision has been offering content from TVB and other providers from different regions, including Korea, Japan, and Mainland China, with programme genre ranging from drama serials, variety programmes to sports. TVB Network Vision's current mode of operation under the traditional pay TV model is based on the provision of a subscription TV service using satellite transmission and third party platform cooperation. The operation of such high cost pay TV business has increasingly become difficult. Due to rampant internet piracy activities exacerbated by technological advancement around the world, the content which TVB Network Vision has planned to bring to its viewers through conventional subscription service is widely available in the market, causing significant shortfall in its revenue targets.
The Company has been informed by TVB Network Vision that due to continuous losses sustained and the unfavourable operating environment for traditional pay TV business, future cash inflow of TVB Network Vision will be significantly reduced. The Board is of the view that the Company's net interest in TVB Network Vision in the amount of approximately HK$654 million may not be recoverable.
The Board believes that viewers, in future, will further embrace the internet for entertainment needs. At the beginning of this year, the Company announced a plan to roll out in early 2016 TVB's "second" platform in Hong Kong. This will be a new platform adopting over-the-top ("OTT") technology through the open internet and delivering a multitude of TVB and third parties' channels and programmes, as well as offering videos- on-demand at fees which are substantially lower than the traditional pay TV business model. Management of TVB hopes that this OTT service will become an attractive and compelling offering, fulfilling viewers' entertainment needs.
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The Board would like to remind that in connection with the sale of the
53% shareholding in Liann Yee Production Co., Ltd. ("Liann Yee") as disclosed by the Company in its announcement on 29 January 2015, a gain (which included fair value gain on the retained interest) in the amount of approximately HK$1,396 million has also been booked in the profit and loss account of the Group for the six month period ended 30 June 2015, upon completion of the transaction on 6 May 2015.
The Company is in the process of finalising its report on the interim results for the six month period ended 30 June 2015. The information contained in this announcement is only the result of a preliminary assessment by the management of the Company, based on the information currently available, and has not been audited or reviewed by the auditor.
Shareholders of the Company and potential investors are advised to exercise caution when dealing in the securities of the Company.
By Order of the Board Adrian MAK Yau Kee Company Secretary
Hong Kong, 4 August 2015
As at the date of this announcement, the Board comprises:
Dr. Charles CHAN Kwok Keung
Executive Directors
Mark LEE Po On Group Chief Executive Officer
CHEONG Shin Keong General Manager
Mona FONG
Jonathan Milton NELSON Anthony LEE Hsien Pin
CHEN Wen Chi
Thomas HUI To
Dr. Raymond OR Ching Fai SBS, JP
Dr. William LO Wing Yan JP
Professor Caroline WANG Chia-Ling
Dr. Allan ZEMAN GBM, JP
Dr. Allan YAP Alternate Director to Dr. Charles CHAN Kwok Keung
Harvey CHANG Hsiao Wei Alternate Director to CHEN Wen Chi
Jessica Huang POULEUR Alternate Director to Jonathan Milton NELSON
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