 |
China Unicom Starts Global IPO to Raise $4.47 Billion
China Unicom, China's second largest telecommunications operator, will raise about 34.8 billion Hong Kong dollars (US$4.47 billion) in what could be Hong Kong's largest ever initial public offering, a source close to the deal said Monday in Hong Kong.
China Unicom, which starts its global roadshow on Monday, has priced its shares at between 11.50 and 14.50 dollars a share and will issue 2.4 billion new shares, the source told AFX-Asia, an AFP financial news subsidiary.
He declined to give more details about the IPO, adding that the net proceeds from the IPO will be used for general business purposes.
"Net proceeds will not be used to fund specific business projects but will be used for loan repayment, for its daily operations and as general working capital," he said.
He said the company had no plans to introduce strategic investors in the new share offer, although this had not been ruled out.
French Telecom and Hutchison Whampoa Ltd. were reported to be in talks to take a portion of the share placement, the Ming Pao daily news said in Hong Kong.
Under China Unicom's initial plan, only five percent would be for public subscription, although this could be raised to a maximum of 20 percent if there was enthusiatic demand, the daily said.
It added that it would be Hong Kong's largest IPO in history if priced at 14.50 each.
China Unicom will start trading its shares in New York on June 21 and in Hong Kong on June 22.
China Unicom increased its share of China's mobile phone market from five to 11 percent in the last year.
The company reportedly had 4.2 million subscribers at the end of 1999 and added another 2.0 million in the first quarter of this year.
Meanwhile, Chinese information industry vice minister Zhang Chunjiang was cited by the official Xinhua news agency as saying that the government would continue to support the development of China Unicom to help it become a formidable competitor in the telecom market.
"We will give China Unicom more preferential policies to help it grow," Zhang said.
China Unicom is now allowed to provide telecom services at a price 10 to 20 percent lower than those of its major competitors -- China Telecom and China Mobile. It is also exempted from providing universal services in the country.
In This Section
|