i-Cable Communications Limited

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents 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.

This announcement appears for information purposes only and does not constitute an invitation or offer to sell, dispose, acquire, purchase or subscribe for any securities of the Company.

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(Incorporated in Hong Kong with limited liability)

(Stock Code: 1097)

CONNECTED TRANSACTION IN RELATION TO THE PROPOSED ISSUE OF UNLISTED LONG-TERM CONVERTIBLE SECURITIES TO FOREVER TOP (ASIA) LIMITED UNDER SPECIFIC MANDATE

Financial adviser to the Company

SOMERLEY CAPITAL LIMITED

Independent Financial Adviser to the Independent Board Committee and the Independent Shareholders

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BACKGROUND

The Group had been loss-making in the recent years and it has been formulating an organisational restructuring which includes, among other things, (i) cost-saving initiatives; (ii) introduction of new contents and channels; (iii) new television content co-operation models; and (iv) strategic review on possible restructuring of the Group’s business portfolio to achieve cost-saving and improve profitability as well as the financial performance of the Group. Owing to the early successes of the aforesaid initiatives, the Group’s 2019 financial performance had improved as compared to that for the previous financial year. In particular, operating costs shrank by approximately HK$128 million and net cash used in operating activities also reduced by approximately 13% to approximately HK$160 million for the year ended 31 December 2019. Since the proceeds raised from the rights issue and the issuance of the 2019 LCS completed in June 2019 have been fully utilised as intended and in order to ensure the Group has sufficient funds to operate and for business expansion including the enhancement of the network infrastructure, the acquisition of programmes and programmes production, the Company entered into the 2021 LCS Subscription Agreement with the Controlling Shareholder and the Board is of the view that the entering into of the 2021 LCS Subscription Agreement is necessary to recapitalise the business to allow sufficient time for the restructuring initiatives to be fully implemented.

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PROPOSED ISSUE OF UNLISTED LONG-TERM CONVERTIBLE SECURITIES

On 27 January 2021 (after trading hours), the Company entered into the 2021 LCS Subscription Agreement with the Controlling Shareholder, pursuant to which the Company has conditionally agreed to issue, and the Controlling Shareholder has conditionally agreed to subscribe for, the 2021 LCS. The principal amount of the 2021 LCS is HK$200 million.

THE LISTING RULES IMPLICATIONS

As at the date of this announcement, the Controlling Shareholder is interested in an aggregate of 3,083,722,894 Shares, representing approximately 43.2% of the total number of the existing issued Shares, and is a substantial Shareholder and therefore a connected person of the Company under Chapter 14A of the Listing Rules. Accordingly, the transactions contemplated under the 2021 LCS Subscription Agreement (including the grant of the Specific Mandate) constitute a connected transaction of the Company under the Listing Rules and the 2021 LCS Subscription Agreement is subject to the reporting, announcement and Independent Shareholders’ approval requirements under Chapter 14A of the Listing Rules.

GENERAL

A circular containing, among other matters, further details of (i) the 2021 LCS Subscription Agreement; (ii) a letter of recommendation from the Independent Board Committee to the Independent Shareholders in relation to the Subscription; and (iii) a letter of advice from the Independent Financial Adviser to the Independent Board Committee and the Independent Shareholders in relation to the Subscription, and together with a notice of the GM are expected to be despatched to the Shareholders on or before 26 February 2021 as additional time is expected to be required for the preparation and finalisation of the circular due to the forthcoming intervening Chinese new year holiday.

PROPOSED ISSUE OF UNLISTED LONG-TERM CONVERTIBLE SECURITIES

Date: 27 January 2021 Issuer: The Company Subscriber: The Controlling Shareholder Principal amount: HK$200 million

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Conversion Price:

The initial Conversion Price (subject to adjustments as set out in the paragraph headed ‘‘Adjustments to the Conversion Price’’ below) shall be HK$0.068 per Conversion Share, which represents:

(i) a premium of approximately 13.3% over the closing price of HK$0.060 per Share as quoted on the Stock Exchange on the Last Trading Day;
(ii) a premium of approximately 13.0% over the average closing price of approximately HK$0.0602 per Share as quoted on the Stock Exchange over the 5 consecutive trading days ending on and including the Last Trading Day;
(iii) a premium of approximately 12.8% over the average closing price of approximately HK$0.0603 per Share as quoted on the Stock Exchange over the 10 consecutive trading days ending on and including the Last Trading Day;
(iv) a discount of approximately 24.4% to the audited consolidated net asset value attributable to the Shareholders as at 31 December 2019 as extracted from the annual report of the Company for the year ended 31 December 2019 of approximately HK$0.090 per Share; and
(v) a premium of approximately 4.6% over the unaudited consolidated net asset value attributable to the Shareholders as at 30 June 2020 as extracted from the interim report of the Company for the six months ended 30 June 2020 of approximately HK$0.065 per Share.

Based on the initial Conversion Price, the 2021 LCS is convertible into 2,941,176,470 Conversion Shares, representing (i) approximately 41.2% of the total number of the existing issued Shares as at the date of this announcement; (ii) approximately 29.2% of the total number of issued Shares as enlarged by the issue of the Conversion Shares in full (assuming no other Shares are issued and no repurchase of Shares by the Company on or before the conversion of the 2021 LCS); and (iii) approximately 19.8% of the total number of issued Shares as enlarged by the issue of the Conversion Shares in full (assuming new Shares are issued pursuant to the full exercises of all outstanding Share Options and the conversion rights attached to the 2019 LCS, but otherwise no other Shares are issued and no repurchase of Shares by the Company on or before the conversion of the 2021 LCS). The Conversion Price was determined after arm’s length negotiations between the Company and the Controlling Shareholder based on, among others, the prevailing market prices of the Shares.

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Adjustments to the The initial Conversion Price will be subject to adjustment for share Conversion Price: consolidations, share subdivisions, re-classification of share into other securities (upon which the Conversion Price will be adjusted proportionately such that holders would receive the number of Shares and/or such other securities which they would have been entitled to had they been converted before the re-classification), capitalisation issues, capital distributions, rights issues, and certain other market standard dilutive events.
Coupon rate: 2.0% per annum, payable quarterly.

Maturity date: The end of tenth (10th) year from the date of issue of the 2021 LCS. On the maturity date, all of the remaining outstanding 2021 LCS will be redeemed by the Company at 100% of the outstanding principal amount of the 2021 LCS together with any interest accrued but unpaid thereon.

Early redemption by The Company may at any time on or after the date of issue of the the Company: 2021 LCS by giving not less than ten (10) business days’ written notice to the holder(s) of the 2021 LCS to redeem all or part of the 2021 LCS at the Redemption Amount.
Mandatory redemption Any holder(s) of the 2021 LCS shall have the right at its option to by the holder(s) of require the Company to redeem all, but not some only, of the 2021 the 2021 LCS: LCS held by such holder at the Redemption Amount (i) when the Shares cease to be listed or admitted to trading or suspend for a period equal to or exceeding ten (10) consecutive trading days on the Stock Exchange, or if applicable, other alternative stock exchange; or (ii) when there is a change of control of the Company. A ‘‘change of control’’ occurs when:
(i) Forever Top ceases to own (directly or indirectly) 30% or more of the voting rights of the issued share capital of the Company; or
(ii) any person or persons acting together acquires Control of the Company if such person or persons does not or do not have, and would not be deemed to have Control of the Company on the date of issue of the 2021 LCS; or
(iii) the Company consolidates with or merges into or sells or transfers all or substantially all of the assets of the Company to any other person, unless the consolidation, merger, sale or transfer will not result in other person or persons acquiring Control over the Company.

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Conversion:

The 2021 LCS is convertible into Shares at any time during the period from the date of the issue of the 2021 LCS up to the close of business on the maturity date at an integral multiple of HK$1 million, subject to the conversion restrictions as set out in the paragraph headed ‘‘Conversion restrictions’’ below.

Conversion restrictions:
The holder(s) of the 2021 LCS may exercise a conversion right only if such conversion:
(A) (where applicable) has been approved or consented to by the Communications Authority; and
(B) will not cause the Company to be unable to meet the minimum public float requirement under the Listing Rules.
Voting: The holders of the 2021 LCS shall not be entitled to receive notices of, attend or vote at any general meetings of the Company or any meetings of any class of Shares, by reason only of it being a holder of the 2021 LCS.
Listing: The 2021 LCS will not be listed on the Stock Exchange or any other stock exchange. No application will be made for the listing of the 2021 LCS on the Stock Exchange or any other stock exchange. No application will be made for the admissibility, deposit, clearance or settlement of the 2021 LCS in the Central Clearing and Settlement System established and operated by HKSCC. No transfer, clearing or settlement services will be provided by HKSCC in respect of the 2021 LCS.

An application will be made to the Listing Committee of the Stock Exchange for the listing of, and permission to deal in, the Conversion Shares to be issued upon the exercise of the conversion rights attached to the 2021 LCS.

Transferability: The 2021 LCS is transferable to other Independent Third Parties except that the transfer would result in the Company being obliged to comply with the obligations prescribed under the Companies (Winding Up and Miscellaneous Provisions) Ordinance in relation to issue of prospectus or initial public offering of securities or (where applicable) a grant by the Communications Authority of the requisite notice of wavier(s) as a result of such transfer of the 2021 LCS has not been obtained.
Ranking of the The Conversion Shares shall be duly and validly issued, fully paid Conversion Shares: and registered, and free from encumbrances and all such Conversion Shares shall rank pari passu in all respects with the fully paid Shares in issue on the relevant date of conversion of the Conversion Shares on the Company’s register of members (after issue of the Conversion Shares upon conversion of the 2021 LCS) respectively and shall accordingly entitle the holders thereof to participate in full in all future dividends or other distributions the record date for which falls on a date on or after the relevant conversion date.

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Conditions of the issuance of the 2021 LCS

The obligation of the Controlling Shareholder to subscribe for the 2021 LCS is subject to the fulfilment or waiver of the following conditions:

(i) The warranties made by the Company in the 2021 LCS Subscription Agreement being true and correct in all material respects when made, and being true, and correct in all material respects as of the date of the completion of the 2021 LCS Subscription Agreement with the same force and effect as if they had been made on and as of such date.
(ii) The Company having performed and complied with in all respects all agreements, obligations and conditions contained in the 2021 LCS Subscription Agreement and the other transaction documents set out in the 2021 LCS Subscription Agreement that are required to be performed or complied with by it on or before the date of the completion of the 2021 LCS Subscription Agreement and having obtained all approvals, consents and qualifications necessary to complete the transactions contemplated thereby at the completion of the 2021 LCS Subscription Agreement.
(iii) The Company having delivered to the Controlling Shareholder a counterpart of the 2021 LCS Subscription Agreement and each of the other duly executed transaction documents set out in the 2021 LCS Subscription Agreement on or prior to the completion of the 2021 LCS Subscription Agreement.
(iv) The Company having obtained, on or before the completion of the 2021 LCS Subscription Agreement, as the case may be, any and all approvals, consents and waivers necessary for consummation of the transactions contemplated by the 2021 LCS Subscription Agreement and the other transaction documents set out in the 2021 LCS Subscription Agreement, including but not limited to:
(a) the approval from the Independent Shareholders at the GM for the consummation of the 2021 LCS Subscription Agreement and the transactions contemplated thereunder, the grant of the Specific Mandate to allot, issue and deal with the Conversion Shares;
(b) the approval from the Stock Exchange for the listing of, and permission to deal in, the Conversion Shares which fall to be issued upon conversion of the 2021 LCS; and
(c) the grant by the Communications Authority of the relevant notice of waiver(s) in respect of the revised shareholding structure of the Company as a result of the issues of the 2021 LCS and the Conversion Shares, if applicable.
(v) There having not occurred any change (nor any development or event involving a prospective change) in the financial or business condition, prospects, results of operations or general affairs of the Company and the Group taken as a whole, which, in the opinion of the Controlling Shareholder, is material and adverse in the context of the issue of the 2021 LCS. The Company shall deliver an officer’s certificate providing confirmation of the foregoing to the Controlling Shareholder on the completion date of the 2021 LCS Subscription Agreement.

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(vi) The Shares shall remain listed on the Stock Exchange at all times prior to the completion of the 2021 LCS Subscription Agreement and the current listing of the Shares not having been withdrawn or the trading of the Shares not having been suspended for a consecutive period of more than three trading days after the date of the 2021 LCS Subscription Agreement up to the completion date of the 2021 LCS Subscription Agreement (or such longer period as the Company and the Controlling Shareholder may agree); and no indication being received before or on the completion date of the 2021 LCS Subscription Agreement from the Stock Exchange to the effect that such listing may be withdrawn or objected to (or conditions will or may be attached thereto) including but not limited to as a result of or in connection with the terms of the 2021 LCS Subscription Agreement or for any other reason.

All of the above conditions precedent are required to be satisfied (or waived, if applicable) by 5:00 p.m. on 30 September 2021 (or such later date as may be mutually agreed by the parties in writing). Save for condition precedent (iv) set out above, the Controlling Shareholder has the sole discretion to waive the conditions precedent (i) to (iii), (v) and (vi) set out above in whole or in part by written notice to the Company.

EFFECT OF THE SUBSCRIPTION ON SHAREHOLDINGS IN THE COMPANY

Set out below are the shareholdings in the Company (i) as at the date of this announcement; (ii) immediately after the 2021 LCS is converted in full; and (iii) immediately after the 2021 LCS and the 2019 LCS are converted and all outstanding Share Options are exercised in full.

Controlling Shareholder Forever Top Other Shareholders Mr. Ng Hung Sang, Ms. Ng Lai King Pamela, South China Finance and Management Limited and South China Securities Limited (Note 3) Public Shareholders Optionholders Total (Note 4)	As at the date of this announcement Number of issued Shares % 3,083,722,894 43.2% 715,988,000 10.0% 3,334,912,626 46.8% — 0.0% 7,134,623,520 100.0%	Immediately after the 2021 LCS is converted in full (Note 1) Number of issued Shares % 6,024,899,364 59.8% 715,988,000 7.1% 3,334,912,626 33.1% — 0.0% 10,075,799,990 100.0%	Immediately after the 2021 LCS and the 2019 LCS are converted and all outstanding Share Options are exercised in full (Notes 1 and 2) Number of issued Shares % 10,568,899,364 71.1% 715,988,000 4.8% 3,334,912,626 22.4% 241,562,240 1.6% 14,861,362,230 100.0%	Immediately after the 2021 LCS and the 2019 LCS are converted and all outstanding Share Options are exercised in full (Notes 1 and 2) Number of issued Shares % 10,568,899,364 71.1% 715,988,000 4.8% 3,334,912,626 22.4% 241,562,240 1.6% 14,861,362,230 100.0%
				100.0%

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Notes:

Pursuant to the terms of the 2021 LCS and the 2019 LCS, the holder(s) of the 2021 LCS and the 2019 LCS may only exercise a conversion right if the issue of the Conversion Shares pursuant to the exercise of the conversion right of the 2021 LCS and the 2019 LCS, respectively, would not cause the Company to be unable to meet the minimum public float requirement under the Listing Rules. Accordingly, the scenarios above are shown for illustrative purpose only.
As at the date of this announcement, the Company has outstanding Share Options convertible into 241,562,240 Shares.
Based on the information available to the Company, the number of Shares represents the aggregate number of Shares held by Mr. Ng Hung Sang, Ms. Ng Lai King Pamela (the spouse of Mr. Ng Hung Sang) and two companies ultimately controlled by him (namely, South China Finance and Management Limited and South China Securities Limited). Mr. Ng Hung Sang personally beneficially owns 156,089,500 Shares. Ms. Ng Lai King Pamela personally and beneficially owns 96,022,500 Shares. South China Finance and Management Limited beneficially owns 876,000 Shares and South China Securities Limited beneficially owns 463,000,000 Shares, both of which are wholly owned by South China Financial Holdings Limited (stock code: 619), which in turn is ultimately and beneficially owned as to approximately 29.36% by Mr. Ng Hung Sang, among which 25.66% is held through his 100% ownedcorporations and 3.70% is held by him as beneficial owner. Ms. Ng Yuk Mui Jessica, a non-executive Director, is the daughter of Mr. Ng Hung Sang and Ms. Ng Lai King Pamela.
The sum of the shareholding percentages of the Shareholders in the table above may not add up to 100.0% due to rounding adjustments.

FUND RAISING EXERCISE OF THE COMPANY IN THE PAST 12 MONTHS

The Company had not conducted any fund-raising activities involving issue of securities in the twelve months prior to the date of this announcement.

INFORMATION ON THE CONTROLLING SHAREHOLDER

The Controlling Shareholder, Forever Top (Asia) Limited, is a company incorporated in Hong Kong with limited liability on 9 January 2015 whose principal business is investment holding. As at the date of this announcement, the Controlling Shareholder is held by Tan Sri Dato’ David Chiu (as to 24.5%), Dr. Cheng Kar-Shun, Henry (through Celestial Pioneer Limited, his wholly-owned company, as to 31.5%), Chow Tai Fook Enterprises Limited (through Celestial Channel Limited, a company wholly owned by Chow Tai Fook Enterprises Limited, as to 14.0%), Mr. John Huan Zhao (through Hony Communications Limited, his wholly-owned company as sole general partner of Expand Ocean L.P., as to 14.0%) and Mr. Li Sze Lim (through Profit Surge Investments Limited, his wholly-owned company, as to 16.0%).

REASONS FOR AND BENEFITS OF THE SUBSCRIPTION

The Group is an integrated communication services provider in Hong Kong, commanding a large television viewer and communications services user base in town. It owns and operates a near universal wireline telecommunications network in Hong Kong to provide media and telecommunications services to over two million households. It is also one of the producers of television and multimedia content based in Hong Kong for distribution over conventional and new media, with a particular focus on news, information, sports and entertainment.

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The Group had been loss-making in the recent years and it has been formulating an organisational restructuring which includes, among other things, (i) cost-saving initiatives; (ii) introduction of new contents and channels; (iii) new television content co-operation models; and (iv) strategic review on possible restructuring of the Group’s business portfolio to achieve cost-saving and improve profitability as well as the financial performance of the Group. Owing to the early successes of the aforesaid initiatives, the Group’s 2019 financial performance improved as compared to that for the previous financial year. In particular, operating costs shrank by approximately HK$128 million and net cash used in operating activities also reduced by approximately 13% to approximately HK$160 million for the year ended 31 December 2019 . Since the proceeds raised from the rights issue and the issuance of the 2019 LCS completed in June 2019 have been fully utilised as intended and in order to ensure the Group has sufficient funds to operate and for business expansion including the enhancement of the network infrastructure, the acquisition of programmes and programmes production, the Company entered into the 2021 LCS Subscription Agreement with the Controlling Shareholder and the Board is of the view that the entering into of the 2021 LCS Subscription Agreement is necessary to recapitalise the business to allow sufficient time for the restructuring initiatives to be fully implemented.

The Board (excluding the members of the Independent Board Committee whose opinion will be set forth in the circular of the Company to be despatched to the Shareholders after having been advised by the Independent Financial Adviser) considers that the Subscription is in the interests of the Company and its Shareholders as a whole and it will provide additional funding for the Group’s capital and operating expenditure, meet the cash flow needs of the Group and provide additional funding to fulfill the investment requirements under the television licences of the Group in the medium to long term as the business of the Group undergoes restructuring in order to turnaround the operations.

The issue of the 2021 LCS provides further protection to the Independent Shareholders from immediate dilution while guaranteeing fund raising of HK$200 million. As the 2021 LCS does not carry any voting or dividend rights with a long-term maturity (10 years), there is no immediate dilution for the Independent Shareholders.

Other fund-raising methods including debt financing and equity placement have been considered by the Board. However, commercial debt financing (even if available) will put further pressure on the already weak financial position and cashflow of the Group. Because of the weak financial performance of the Group, an equity placement to Independent Third Parties may require a higher discount on issue price and result in more dilution for the Shareholders.

Having considered the above factors, the Board considers that the Subscription is a wellbalanced option for the Company, improving the liquidity of the Group while mitigating immediate dilution of the Independent Shareholders. On this basis, the Directors (excluding the members of the Independent Board Committee whose opinion will be set out in the circular of the Company to be despatched to the Shareholders after having been advised by the Independent Financial Adviser) are of the view that the Subscription is in the interests of the Company and the Shareholders as a whole and the terms of the Subscription are fair and reasonable.

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PROPOSED USE OF PROCEEDS

The estimated net proceeds from the Subscription (after deducting the expenses) are approximately HK$198 million. Based on the estimated net proceeds and the total number of the Conversion Shares (assuming conversion of the 2021 LCS in full at the initial Conversion Price of HK$0.068 per Conversion Share), the net price to be received by the Company for each Conversion Share will be approximately HK$0.067.

The Company intends to apply the net proceeds from the Subscription as to:

(i) approximately HK$100 million for investments in capital expenditure for the enhancement of network infrastructure and other relevant capital expenditures in the 18 months following the completion of the Subscription. The reasons for incurring such capital expenditure are, including but not limited to, (a) enhancement of the Group’s overall competitiveness of network coverage in the market; and (b) enhancement of network infrastructure as customers are constantly demanding for better quality and higher-speed internet services which enable subscribers to enjoy more stable and faster internet access.
(ii) approximately HK$80 million for acquisition of programmes from Independent Third Parties and programme production including but not limited to the followings in the 18 months following the completion of the Subscription:
acquired channels amounting to approximately HK$40 million;
live programmes, movies and dramas, and other entertainment programmes amounting to approximately HK$20 million; and
self-produced programmes amounting to approximately HK$20 million.

The Group will acquire rights for channels and/or programmes and produce programmes for broadcasting on the Group’s pay television channels and provide the domestic free television programme service (as respectively required under the Pay TV Licence and the Free TV Licence) from time to time. The programming content includes news, finance, sports, lifestyle, documentary, children, movies, dramas and general entertainment.

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Save for certain programming commitments, mainly acquired channels, the Company has not yet identified any other acquisition or investment opportunities regarding the acquisition of programmes from Independent Third Parties. Despite the Group had yet to identify any acquisition or investment opportunities regarding the acquisition of programmes, to continue to update the Group’s programming library, sourcing for new programmes have been on-going on a continuing basis. With sufficient funding on hand, the Group will be able to commit to ideal programmes once they are identified. Acquired channels committed by the Group included a variety of the programmes such as world-class sports, entertainment, lifestyle and news contents.

Set out below are the investment requirements under the television licences of the Group:

Pay TV Licence

Upon acceptance of the renewal of the Pay TV Licence of HKCTV for the period of 12 years from 1 June 2017 to 31 May 2029, HKCTV will be subject to a commitment of a six-year investment plan of HK$3,447 million from 2017 to 2023, comprising HK$251 million of capital investment and HK$3,196 million of programming investment in content including in-house channels containing self-produced and/or acquired programmes as well as in acquired channels.

Free TV Licence

In accordance with the terms of the Free TV Licence, FTV has issued a performance bond in favour of the Hong Kong Government in the sum of HK$20 million. Under the terms of the performance bond, unless the Communications Authority otherwise approves or determines:

within 18 months from the commencement date of the Free TV Licence (being 31 May 2016) (the ‘‘Free TV Commencement Date’’), FTV shall incur not less than HK$168 million as the capital and programming expenditure for providing the domestic free television programme service;
within 30 months from the Free TV Commencement Date, FTV shall incur not less than HK$336 million as the cumulative capital and programming expenditure for providing the domestic free television programme service; and
within 42 months from the Free TV Commencement Date, FTV shall incur not less than HK$504 million as the cumulative capital and programming expenditure for providing the domestic free television programme service.
(iii) approximately HK$18 million for general working capital including but not limited to salaries and benefits, rental and utilities, government/music licence fees, other general and administrative expenses for the Group in the 12 months following the completion of the Subscription.

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THE LISTING RULES IMPLICATIONS

As at the date of this announcement, the Controlling Shareholder is interested in an aggregate of 3,083,722,894 Shares, representing approximately 43.2% of the total number of the existing issued Shares, and is a substantial Shareholder and therefore a connected person of the Company under Chapter 14A of the Listing Rules. Accordingly, the transaction contemplates under the 2021 LCS Subscription Agreement (including the grant of the Specific Mandate) constitute a connected transaction of the Company under the Listing Rules and the 2021 LCS Subscription Agreement is subject to the reporting, announcement and Independent Shareholders’ approval requirements under Chapter 14A of the Listing Rules.

The 2021 LCS Subscription Agreement was approved by the Board on 27 January 2021 (after trading hours). As Tan Sri Dato’ David Chiu and Mr. Hoong Cheong Thard are also the directors of Forever Top and by reason of Mr. Tsang On Yip, Patrick’s family relationship with Dr. Cheng Kar Shun, Henry and Mr. Andrew Wah Wai Chiu’s family relationship with Tan Sri Dato’David Chiu, the above-mentioned Directors have abstained from voting at the board meeting to approve the 2021 LCS Subscription Agreement and the transactions contemplated thereunder.

The Controlling Shareholder and its associates shall abstain from voting in respect of the resolution relating to the 2021 LCS Subscription Agreement at the GM.

THE INDEPENDENT BOARD COMMITTEE AND THE INDEPENDENT FINANCIAL ADVISER

The Independent Board Committee comprising all the independent non-executive Directors has been established to advise the Independent Shareholders as to whether the entering into of the 2021 LCS Subscription Agreement is in the interests of the Company and the Shareholders as a whole and the terms of the 2021 LCS Subscription Agreement are on normal commercial terms and fair and reasonable so far as the Independent Shareholders are concerned, and to advise the Independent Shareholders on how to vote at the GM. The Independent Financial Adviser has been appointed to advise the Independent Board Committee and the Independent Shareholders in this regard.

GENERAL

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DEFINITIONS

Unless the context otherwise requires, terms used in this announcement shall have the following respective meanings:

‘‘2019 LCS’’
the unlisted long-term convertible bonds issued by the Company to the Controlling Shareholder in the principal amount of HK$568 million in June 2019
‘‘2021 LCS’’
the unlisted long-term convertible bonds to be issued by the Company in the principal amount of HK$200 million pursuant to the 2021 LCS Subscription Agreement
‘‘2021 LCS Subscription Agreement’’
the agreement dated 27 January 2021 entered into between the Company and the Controlling Shareholder in relation to the Subscription
‘‘Board’’
the board of Directors
‘‘Communications Authority’’ the Communications Authority of Hong Kong, an independent statutory body established under the Communications Authority Ordinance (Cap. 616) on 1 April 2012
‘‘Company’’
i-CABLE Communications Limited (stock code: 1097), a company incorporated under the laws of Hong Kong and the shares of which are listed on the Main Board of the Stock Exchange
‘‘connected person(s)’’ has the same meaning ascribed to it under the Listing Rules
‘‘Control’’
acquisition or control of more than 50% of the voting rights of the issued share capital of the Company or the right to appoint and/or remove all or the majority of the members of the Company’s board of directors or other governing body, whether obtained directly or indirectly, and whether obtained by ownership of share capital, the possession of voting rights, contract or otherwise
‘‘Controlling Shareholder’’ or Forever Top (Asia) Limited, a company incorporated in ‘‘Forever Top’’ Hong Kong with limited liability
‘‘Conversion Price’’
the conversion price of HK$0.068 per Conversion Share pursuant to the 2021 LCS Subscription Agreement
‘‘Conversion Shares’’
the new Shares to be issued upon exercise of the conversion rights under the 2021 LCS
‘‘Director(s)’’
the director(s) of the Company

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‘‘Free TV Licence’’	domestic free television programme service licence issued to
	FTV
‘‘FTV’’	Fantastic Television Limited, a private company
	incorporated in Hong Kong, which is a consolidated
	structured entity of the Company and the Company holds
	14.9% of its voting rights
‘‘GM’’	the general meeting of the Company to be convened to
	approve, among other things, the 2021 LCS Subscription
	Agreement and the Specific Mandate
‘‘Group’’	the Company, its subsidiaries and consolidated structured
	entities of the Company
‘‘HK$’’	Hong Kong dollar(s), the lawful currency of Hong Kong
‘‘HKCTV’’	Hong Kong Cable Television Limited, a private company
	incorporated in Hong Kong and a wholly-owned subsidiary
	of the Company
‘‘HKSCC’’	Hong Kong Securities Clearing Company Limited
‘‘Hong Kong’’	the Hong Kong Special Administrative Region of the
	People’s Republic of China
‘‘Independent Board	the independent committee of the Board comprising all
Committee’’	independent non-executive Directors, namely, Mr. Lam Kin-
	Fung, Jeffrey, Dr. Hu Shao Ming Herman, Mr. Luk Koon
	Hoo, Roger and Mr. Tang Sing Ming Sherman, which is
	established to advise to the Independent Shareholders in
	relation to the Subscription

‘‘Independent Financial Yue Xiu Capital Limited, a licensed corporation to carry out Adviser’’ Type 6 (advising on corporate finance) regulated activity under the Securities and Futures Ordinance, being the independent financial adviser appointed by the Independent Board Committee for the purpose of advising the Independent Board Committee and the Independent Shareholders in relation to the Subscription
‘‘Independent Shareholders other than (i) the Controlling Shareholder; (ii) Shareholder(s)’’ the associates of the Controlling Shareholder; and (iii) Shareholders who are involved in, or interested in, the Subscription, who are required under the Listing Rules to abstain from voting in the GM
‘‘Independent Third third party(ies) independent of the Company and any Party(ies)’’ connected person(s) of the Company and not a connected person of the Company

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‘‘Last Trading Day’’ 27 January 2021, being the last trading day for the Shares before the publication of this announcement

‘‘Listing Committee’’ has the same meaning ascribed to it under the Listing Rules
‘‘Listing Rules’’ the Rules Governing the Listing of Securities on the Stock Exchange
‘‘Optionholder(s)’’ holder(s) of the Share Option(s)
‘‘Pay TV Licence’’
the domestic pay television programme service licence issued to HKCTV
‘‘Redemption Amount’’
100% of the outstanding principal amount of the 2021 LCS, together with all accrued but unpaid interest
‘‘Share(s)’’ ordinary share(s) of the Company
‘‘Shareholder(s)’’
the holder(s) of the Share(s)
‘‘Share Option(s)’’ a right to subscribe for Shares pursuant to the share option scheme of the Company adopted on 24 May 2018 or any share option granted thereunder
‘‘Specific Mandate’’ the specific mandate to be sought from the Independent Shareholders at the GM to allot, issue and deal in the Conversion Shares
‘‘Stock Exchange’’ The Stock Exchange of Hong Kong Limited
‘‘Subscription’’
the subscription of the 2021 LCS by the Controlling Shareholder pursuant to the 2021 LCS Subscription Agreement
‘‘subsidiary(ies)’’ has the same meaning ascribed to it under the Listing Rules
‘‘%’’ per cent. or percentage

By order of the Board

i-CABLE Communications Limited Kwok Chi Kin Company Secretary

Hong Kong, 27 January 2021

As at the date of this announcement, the Board comprises eleven Directors, namely Tan Sri Dato’ David Chiu (Chairman), Dr. Cheng Kar-Shun, Henry (Vice-chairman), Mr. Tsang On Yip, Patrick, Mr. Hoong Cheong Thard, Mr. Lie Ken Jie Remy Anthony Ket Heng and Ms. Ng Yuk Mui Jessica as non-executive Directors, Mr. Andrew Wah Wai Chiu as an executive Director, and Mr. Lam Kin-Fung, Jeffrey, Dr. Hu Shao Ming Herman, Mr. Luk Koon Hoo, Roger and Mr. Tang Sing Ming Sherman as independent non-executive Directors.

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i-Cable Communications Limited Capital/Financing Update 2021

49682_rns_2021-01-27_b8cc50d4-5530-4954-a5ea-3611804bc87e.pdf