The share price of i-Cable Communications, the internet and cable television arm of Hong Kong conglomerate Wharf Holdings, surged 52% on its debut day on the Hong Kong stock exchange with 93 million shares changing hands.
The spinoff from Wharf issued 360 million new shares in its IPO earlier this month for a dual listing on the Stock Exchange of Hong Kong and Nasdaq. About 324 million shares were subscribed by overseas investors and 36 million by locals. Of the HK$4.01bn ($514m) proceeds, $2.55bn ($327m) will be used to repay loans owed to parent Wharf while the rest will be for the company’s general working capital, said i-Cable president Stephen Ng.
Ng said the company is negotiating with several international investors about forming strategic alliances to explore new markets and provide more services to the local market. Following the IPO it is well positioned for expansion with a cash hoard of HK$1bn($128m) and a gearing of less than 10%.
The company is the only cable television operator in Hong Kong and plans to launch a cable-based broadband internet access business in January, after the government grants a license by the end of this year. It aims to eventually capture a 40% to 50% share of the local market, Ng said. Cable & Wireless HKT is the only other broadband internet access provider in Hong Kong.
He said i-Cable will invest $400m within the next two years to upgrade its micro-fiber to hybrid fiber coaxial network and to complete fiber network rollout. The company is set to deliver voice-over internet protocol service by 2001 to further exploit the capabilities of its two-way broadband cable network, he said.
