The 2004 decision significantly cut concession fees paid by the television broadcaster to the government and allowed it to water down its original heavy concentration on news programming. Yesterday's decision reverses the situation, leaving iTV burdened with huge concession payments and needing to shed popular entertainment programming.

Brokerage houses rushed yesterday to lower the fair value of iTV's shares.

The stock, which closed on Monday at Bt9.35, started the day with a tumble and heavy selling pressure soon after the court's ruling pushed the price down to close at Bt6.55. A Seamico Securities analyst said that following the Central Administrative Court's ruling, it was now risky to invest in iTV shares, the fair value for which will tumble to about Bt4.

In January 2004, iTV won the Arbitration Court's consent to pay an annual concession fee of either 6.5 per cent of revenue or Bt230 million, whichever is higher.

The original rate was 44 per cent of revenue or Bt1 billion per year, whichever was higher.

The Arbitration Court also allowed the company to adjust its programming content. Its news/entertainment programme ratio was revised from 70:30 to 50:50.

However, the Office of the Permanent Secretary of the PM's Office, which awarded iTV the concession, asked the Central Administrative Court to override the Arbitration Court's ruling, claiming it was illegal.

Yesterday's ruling means iTV Plc will have to resume paying the original annual concession fees and return to the original proportion of news and entertainment programmes, as well as paying backdated concession fees of around Bt1.5 billion to the Office of the Permanent Secretary of the PM's Office.

iTV said it would appeal the case before the Supreme Administrative Court.

Kim Eng Securities estimated that iTV would swing into a net loss of Bt722 million this year if it lost the appeal, or a Bt757-million net profit if it won.

The broker cut its fair value for the broadcaster's shares to Bt5.20 each.

Its net-loss estimate takes into account the broker's current assumption that iTV's first-quarter net profit will drop by 3 per cent quarter on quarter and 36 per cent year on year to Bt103 million due to a sharp decline in gross margin.

A change in accounting methods imposed within the Shin Corp group in the first quarter also plays a role in the forecast.

Shin Corp now owns 53 per cent of iTV Plc.

Capital Nomura Securities has lowered its fair value for iTV shares to Bt2.04, while Sicco Securities downgraded the TV operator's fair value to Bt1.50 per share.

According to Dow Jones Newswires, an analyst at Trinity Securities said the court's ruling would reduce iTV's fair value to about Bt5 a share.

Siriporn Chanjindamanee

The Nation