China Unicom Plans A SharesChina Unicom is considering issuing A shares in the domestic stock market to raise funds for the construction of its CDMA (code division multi-access) network, the company said in a statement Wednesday."Unicom is still studying the possibility of financing the CDMA roll-out through a domestic A-share offering," the company said. Market analysts expect the decision will soon be announced as the construction of the CDMA network has strong government support. A subsidiary of China Unicom has already listed on the stock markets of New York and Hong Kong. The parent company holds major shares in the listed firm. Regarding the domestic listing, Unicom said it will set up a subsidiary and inject part of its overseas-listed stocks into the new firm. It may then list on stock markets in Shanghai or Shenzhen. The construction of the CDMA network will start later this month and a pilot operation is scheduled to begin in October. Unicom's CDMA network is the country's first such mobile telecommunication network. It will provide higher data delivering quality than the present GSM (global system for mobile communication) network. The network has attracted interests from most of the leading international telecom giants and domestic equipment manufacturers. The company said it will invest 20 billion yuan (US$2.4 billion) this year in the construction and the investment will amount to 70 billion yuan (US$8.5 billion) within three years. "The domestic listing will be a boost to Unicom's business as local stock buyers will tend to use the company's service,'' said Jim Lin, chief telecom analyst of Frost & Sullivan, a US-based research house. He said the listing will link investors with service subscribers and will significantly increase Unicom's subscriber base. As the pilot operation of the CDMA network will start in October, Lin expects Unicom will make an initial public offering (IPO) as early as July. He forecast that Unicom's A shares will be in demand on the domestic market as China's stock traders are seeking telecom stocks. At least 50 billion yuan (US$6 billion) will be raised through the IPO, he said. Source: China Daily |
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