Hong Kong-listed CMMB Vision is set to acquire controlling interest in Taiwan-based DTH platform Dish-HD Asia to accelerate its rollout of multimedia satellite services across China.
The media group has agreed to initially pay US$2m for 5% of a holding…
Hong Kong-listed CMMB Vision is set to acquire controlling interest in Taiwan-based DTH platform Dish-HD Asia to accelerate its rollout of multimedia satellite services across China.
The media group has agreed to initially pay US$2m for 5% of a holding company called Soaring Idea Holdings Ltd. It will then have six months to tap an option to acquire a further 46% stake for an additional US$4m.
Soaring is currently awaiting regulatory approval to purchase a majority 51% stake in Dish. The company was incorporated under the laws of the Republic of Seychelles on 21 October 2014 and is wholly-owned by Yu Yueh-Lung, a third party independent of CMMB and its connected persons, according to a stock exchange filing.
CMMB has not decided how it will finance the deal and said its options include bank debt, private equity, shareholder loans, cash in the bank and a share placement.
The company was unable to comment before the press deadline.
Dish was originally set up as a joint venture between satellite operators AsiaSat and EchoStar, and launched commercial services in June 2010 through AsiaSat-4’s Ku-band BSS beam. However, AsiaSat sold off its share in late 2011 because of the start up’s prolonged losses. EchoStar, the sister company of US DTH giant Dish Network, said in March 2012 that it sold 95% of the JV. It currently holds roughly 5% of its class B common shares.
Today Dish provides 76 TV channels and claims to have strong programming partnerships with Hollywood and global content providers, although it is still yet to breakeven. The group posted a net loss of about US$11.88m for the year ended 31 December 2013, on revenues of around US$6.64m.
But the group’s management is optimistic about reaching profitability as it nears the launch of 4K ultra-high-definition TV and satellite-based internet services early next year.
CMMB plans to leverage on the group to become the first converged satellite service provider in Asia, offering an integrated entertainment environment across a variety of consumer devices.
It aims to pair the DTH platform up with capacity from two new satellites that it is looking to order in partnership with New York Satellite Holdings, a US-based group that recently bought the AsiaStar satellite at 105E and its associated L-band spectrum rights.
An RFI has been issued to satellite makers to build the first of two replacement satellites for AsiaStar. CMMB has said it aims to order the first of these before the end of this year to launch it in early 2017. It plans to order the second bird, to be co-located with the first, before the end of 2015.
Commenting on its Dish acquisition, CMMB founder and president Charles Wong said: “We believe that satellite-based mobile and DTH satellite multimedia business and its related services will develop quickly with great potential returns to the shareholder due to the rapid increasing demand on Hollywood contents and data delivery through high price-to-performance satellite-based mobile multimedia platform in China and the rest of Asia.”
The AsiaStar satellite has a coverage ranging from India to Japan, and CMMB has said it plans to replicate its Chinese model in other Asia markets.
The group’s services are based on the China Mobile Multimedia Broadcast (CMMB) standard, which it claims is more cost-efficient than Europe’s DVB-SH standard for digital video broadcasting to handheld devices.
