
GPs commit $110m to PCCW's video streaming unit
Hony Capital, Foxconn Ventures and Temasek Holdings have agreed to acquire a combined 18% stake in PCCW International OTT, a video-streaming subsidiary of Hong Kong telecom giant PCCW, for $110 million.
PCCW Media, which runs pay-TV services in Hong Kong under the Now TV brand, will remain the unit’s controlling shareholder.
Hony has separately been granted an option to subscribe to up to two million preference shares, representing an approximately 3% stake in the business, at an exercise price of $10 per share, PCCW said in a filing. The shares are redeemable after five years at the original subscription price if an independent IPO has not occurred.
PCCW OTT operates in 24 emerging markets, providing video-streaming services under the Viu and Vuclip brands, and music-streaming services under the Moov brand. Launched in October 2015, Viu had over 12 million monthly active users as of June. Operating under a dual ad-supported and subscription model, it delivers mostly Asian content with local language subtitles. PCCW Media acquired US-based Vuclip in May 2015. It focuses on providing web-based and short-form content.
Following the transaction, PCCW OTT plans to increase its penetration within its existing markets and also expand into other high-growth markets.
"Hong Kong is at the forefront of international collaboration responding to the Belt and Road Initiatives, and Viu at present has laid out effective business map in Southeast Asian countries along the Belt and Road, which will no doubt play an essential and unique role to help the culture, content as well as creative ideas to travel abroad,” John Zhao, chairman and CEO of Hony Capital, said in a statement.
Hony is currently investing its latest fund – Hony Capital Fund VIII – which closed at $2.7 billion last year. The GP previously bought a controlling stake in Chinese online TV provider PPTV alongside Suning Commerce in 2013. Its other media-related investments include movie studio STX Entertainment – which also counts PCCW as an investor – and Shanghai-based boutique entertainment studio Linmon Pictures.
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