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China Mobile Raises Funds
China Mobile (Hong Kong) Ltd, a listing arm of China's biggest mobile communications operator, plans to raise net proceeds of about US$6.45 billion from a placement of 1.068 billion new shares at a price of HK$48 (US$6.16) each, the firm said Wednesday.
According to Wang Xiaochu, chairman of China Mobile, the funds raised will be used to finance the purchase of seven mobile telecommunications companies in China.
The Hong Kong-listed mainland company announced in early October the US$32.84 billion purchase of seven Chinese mobile telephone networks from its parent China Mobile Communications Corp together with Britain's Vodafone Group.
According to the agreement, Vodafone will invest US$2.5 billion in China Mobile as part of the financing for the deal. In return, Vodafone will receive a 2 per cent share of the company and access to a market forecast as the world's second largest telecommunications firm by the end of the year.
The company said underwriters were granted an over-allotment option, exercisable by, on or before November 28, for up to 160 million additional shares offered at the same price.
China Mobile will also offer US$600 million in 2.25 per cent convertible notes due in 2005 at 100 per cent of the principal amount.
The convertible notes are expected to be listed on the Luxembourg Stock Exchange from November 3.
The acquisition would also lift the subscriber base of China Mobile (Hong Kong) to 39.3 million from 23.9 million as of September 20, representing a market share of about 55.9 per cent of the mainland's mobile phone users, according to the company's document.
The deal will make China Mobile the world's second largest operator in subscriber numbers with a total of 35.28 million users, after Vodafone, which has 59 million subscribers. [Source: chinadaily.com.cn]
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