It is not clear that the rescue will come in time, nor that it will be approved by Hong Kong’s broadcast regulators.
The company is set to lose its broadcasting license in April next year, and has still not paid its all of its staff their salaries from August.
The deal was announced on Thursday by ATV executive director Ip Ka-po, wo said that former major shareholder Wong Ben-koon, will sell most of his 52% stake.
China Culture, a subsidiary of Qingdao, China-based Sino Asia Media Group says it plans to invest up to HK$10 billion into media businesses, including HK$5.1 billion into the struggling broadcaster.
Hong Kong’s Communications Authority said that it had received notification of a change of ownership, but said that these must comply with rules on non-Hong Kong ownership.
One Hong Kong Lawmaker, Charles Mok has already raised questions about growing mainland Chinese influence at ATV. Ip, however, said “It is absolutely not ‘Red Capital’.”
Chinese finance publication Caixin has reported that Sino Asia’s chairman Si Rongbin was detained by authorities in the mainland for criminal acts, including allegedly using forgeries of a company seal and signature of a legal representative to obtain bank loans in August 2003, as well as suspected false payment of salaries in July 2004. He joined ATV’s board in August.
The Communications Authority earlier this year announced that it would strip ATV of the broadcast license that it has held for a continuous 58 years of operation. The company has falling ratings, a succession of financial problems and has been penalized for false reporting. ATV has said that it intends to reapply for its license, though the Communications Authority said that this has not yet happened.
New digital TV companies are expected to launch. And all challengers to TVB’s TV market dominance will also have to face additional competition from streaming service Netflix which said it will launch in Hong Kong in early 2016, and from Chinese streaming service LeTV, which is already operational in the territory.