China Telecom Resumes Plan to Go for List

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Last updated at: (Beijing Time) Tuesday, May 21, 2002

China Telecom Resumes Plan to Go for List

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China Telecom is going to get listed in Shanghai, Hong Kong and New York respectively after the blow of splitting. Operating new business on May 16, it is facing a lot of difficulties. Going for list is the best way to relief of the pressure.

Sources revealed China Telecom will launch a campaign of raising capital by issuing floating shares on May 22, which will be co-sponsored by Morgan Stanley, Merrill Lynch and CICC at the appointed time. Experts predict China Telecom will be able to raise at least a capital of 3 to 4 billion yuan.

Personnel concerned said a sales group will start to conduct property assessment, which is decisive for the scale of the campaign, after the plan of raising capital is formerly launched. The sales agent is expected to submit the application to the US Securities and Exchange Commission before the end of this July for the list preparation. China Telecom will confirm the price of floating shares to public and go for list before the end of October.

Challenges urge China Telecom to explore new chances

The former China Telecom was left with a large amount of debts after the business split between the post and the telecom in 1998, its rate of debts accounting for 40 percent. Owing to increased competition, adjustment to the charge and the transform of the government's management mechanism, China Telecom's market shares began to shrink and that leads to no more revenue.

All of the above-mentioned factors urge the company to explore new opportunities for the sustainable development, among which raising capital by floating shares is the best choice.

Moreover, the forthcoming competition between foreign and Chinese telecom sectors after China's entry into the WTO also poses great challenge to China Telecom. Compared with foreign telecom operators, China Telecom is suffering from insufficient capital so it has motive to get listed.

Last year China Telecom once proposed a "6 plus 1" listing scheme but it was finally denied by the State Development Planning Commission and the State Council.

One year later, China Telecom's plan to go for list overseas was raised for discussion again. It will intimate the listing style of China Unicom and China Mobile, choosing high-quality property for listing first, and then purchasing the property of the parent company, or going for listing in China and issuing bonds.

By PD Online Staff Yang Ruoqian

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