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China Netcom to Raise US$500 Million via Share Placement by Yearend
China Netcom Corp., a major telecommunications carrier, plans to raise US$500 million from a private share placement by the end of the year, the company said Tuesday, December 5.
The group of investors is led by News Corp, Goldman Sachs Group, and MSD Capital - a personal investment company owned by Michael Dell, founder of Dell Computer Corp. Along with a few smaller investors, the group will take an 11 per cent stake in China Netcom, Chief Executive Edward Tian Su Ning told Dow Jones Newswires in a telephone interview.
'We plan to use the funds for our capex (capital expenditure) and to expand our network,' Tian said.
The company chief said China Netcom's capital expenditure for the year ending March 31, 2001 will reach 7.3 billion yuan (US$880million), a 35 per cent jump from 5.4 billion yuan (US$650 million) in the previous year.
Tian added China Netcom has also obtained a 9 billion yuan (US$1.084 billion) line of credit from a consortium of banks made up of China Construction Bank, Bank of China and China Commerce Bank.
China Netcom is owned by four mainland parties - the Ministry of Railroads, the State Administration of Radio, Film and Television, the Shanghai municipal government, and the China Academy of Sciences, each holding a 25 per cent stake.
After the placement, the four shareholders will see their stakes diluted to 22.25 per cent each, Tian said.
China Netcom runs the country's first broadband Internet backbone that links 17 cities and offers high-speed Internet services.
The 8,490-kilometer fiber-optic backbone has a maximum capacity for transmitting voice and data at 40 gigabytes a second.
Tian is in Hong Kong attending the International Telecommunication Union's Asia conference.
Source: chinadaily.com.cn
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