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China Telecom Decides Consignees for Listing Abroad
The Morgan Stanley Dean Witter, Merrill Lynch and China International Capital Co., Ltd. (CICC) were lately chosen as consignees of China Telecom for its listing abroad. In so far as the scale of its initial offering is concerned China Telecom has set a new record high in Asia with the exception of Japan.
China Telecom, the largest telecom company in mainland, is as reported to list its initial shares in Hong Kong and New York in the second quarter of 2001. It is expected to raise US$10 to 15 billion, much more than the US$5.65 that China Unicom collected in Hong Kong and the United State, and the US$4.2 billion attained by China Mobile in 1997.
Before that, the aforesaid companies stood out winners in the bidding campaign for consignee qualification from amongst six investment banks. Since China Telecom dominates the operation of fixed telephones in the mainland of China, the competition among the investment companies was extremely serious.
As released from the sources close to the final decision-maker this case will engender a commission of more than US$0.3 billion to be shared equally out among the three investment banks.
The CICC, an investment bank out with the domestic capital, is a joint venture established by the Morgan Stanley Dean Witter and the Construction Bank of China with 35 percent of its shares held by the former. Having started cooperation long ago the Morgan Stanley Dean Witter and the CICC cooperatively raised a fund of US$5.65 billion for China Unicom in its initial listing in June, 2000, also a record in Asia aside from Japan. Besides, they also consigned the offering of China Petroleum and Chemical Corporation, pooling in an amount of US$3.46 billion for their consignor.
Merrill Lynch was also chosen to consign the list of China National Offshore Oil Corp., in this February.
The other three competitors are, as reported, the Goldman Sachs Group Inc., UBS Warburg and the BOC Group.
According to analysts, last week saw the Chinese government announce the standard for the adjustment of telecom charge, i.e., to reduce by large the charges for trunk call and line leasing and the fee for connecting the Internet. China Telecom, as the largest corporation engaging in Internet connection and in control of almost all the fixed telephones in China, will be confronted with a severe challenge.
By PD Online member staff Deng Gang
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