Tong Hua joins Spring News for digital channel

Corporate February 11, 2014 00:00

By Sugree Manchainimit,

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Veteran investor Wichai Thongtang's Tong Hua Communications is diversifying into the digital terrestrial TV business by investing Bt250 million in Spring News Television, which recently won a licence for a digital news channel.

“Tong Hua is the country’s leading Chinese-language daily newspaper. It has experience in the media business and has been based in Thailand for more than 53 years. Once digital terrestrial TV arrives, it will be the right time to expand its business portfolio into this field,” Wichai said yesterday. 
Wichai owns 9.84 per cent of Tong Hua Communications, while his partner Somnuk Kyavatanakij, chairman of the company, holds the biggest share at 14.78 per cent. Wichai, who is also chairman of CTH, a leading pay-TV operator, said the connection with Spring News TV would support CTH’s business in the near future. 
Yesterday, Tong Hua Communications reported to the Stock Exchange of Thailand that it would invest Bt250 million for a 25-per-cent stake in Spring News Television. The offer was made with some key conditions. 
Spring News TV has to acquire a licence for a national digital-television service to air news and documentaries. 
Spring News TV has to boost its registered capital from Bt5 million to Bt1 billion and execute the process to let Tong Hua hold at least 25 per cent in the company by September 30. Tong Hua will delay its decision to exercise its right to invest in Spring News TV until later. 
Spring News TV has to give Tong Hua the first right to refusal to invest up to 60 per cent in the company. The right will be valid for two years.
If Spring News TV fails to complete the conditions, Tong Hua has the right to terminate the investment agreement and redeem its total investment plus compensation of 12 per cent per annum. 
The Solution Corner (1998), the parent of Spring News TV, has to guarantee the return of Tong Hua’s investment under this condition. The Solution Corner is listed on the Market for Alternative Investment. 
Natee Sukonrat, chairman of the broadcasting committee of the National Broadcasting and Telecommunications Commission, said the format of acquisition might be allowed if both the licence holder and digital TV operator remained unchanged.