VTV’s plan to divest digital satellite television K+ will be put on a temporary halt due to the government’s decision to clarify its finances, which has been regularly reporting losses for many years.
|Despite suffering losses, VSTV regularly spends huge amounts of money to purchase the broadcasting rights to international football leagues (Source: dantri.com.vn)
Deputy Prime Minister Vuong Dinh Hue has just requested Vietnam Television to collaborate with the State Auditor General to clarify the financial status of Vietnam Satellite Digital Television Limited (VSTV), the owner of the K+ television channel. In addition, VTV has to provide information related to the legal aspects of VSTV’s business activities as well as report on its business operations in 2018 to the prime minister in January 2019.
Thus, troubles related to VSTV’s business activities put VTV’s divestment plans on ice once again. Due to the firm’s weak business performance, VTV has been intending to divest its 51 per cent share in VSTV for two years now.
In the Government Office’s latest official document guiding VSTV in its divestment and restructuring, the deputy PM stated that these plans need to be carried out urgently.
The DPM also required the Ministry of Information and Communications (MIC) and the Ministry of Justice to investigate the dossiers related to VSTV’s joint venture contract, then propose measures on the implementation of the divestment and restructuring plans, which would be mutually acceptable for the Vietnamese and the foreign partner.
As of the end of 2017, K+’s total net losses reached VND2.7 trillion ($117.4 million), VSTV's equity hit negative VND2.4 trillion ($104.3 million). Specifically, in 2014, the firm reported a loss of VND232 billion ($10 million), while its revenue was VND1.116 trillion ($48.5 million). In 2015, K+’s revenue hit VND1.252 trillion ($54.4 million), while its loss was VND89 billion ($3.87 million).
However, despite suffering losses for many years now, VSTV has regularly spent dozens of million dollars to purchase the broadcasting rights for international football leagues. Furthermore, after being established 10 years ago, the cable television has also entered into a co-operation with cinema giants like BHD, CGV, and others to monopolise the broadcast of their blockbusters on the K+ channel.
Thanks to these strategies, VSTV’s market share has significantly increased, which has drawn its losses into question.
VSTV was established in 2009 in a 51-49 joint venture between VTV and France-based Canal+ Group.