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China Mobile (Hong Kong) Announces Plan to Issue Bond
China Mobile (Hong Kong), the listed branch of the country's dominant mobile telecom operator, will issue corporate bonds worth 5 billion yuan (US$603.8 million) in July.
The issue will be one of the biggest in the country's corporate bond history, said Ji Wei, spokesman for China Mobile (HK).
These 10-year bonds will be used to pay part of bank loans the company borrowed last year to acquire mobile businesses in seven provinces from its parent company.
The company borrowed 12.5 billion yuan (US$1.51 billion) from eight banks to fund the acquisitions in October.
Repayments worth 5 billion yuan are due this month, with the remaining 7.5 billion yuan (US$903 million) due in November 2003.
The company's floating rate bonds will be sold to domestic institutional and individual investors only. They are expected to start trading in July.
As an overseas-listed company, China Mobile (HK) will issue the bonds through its wholly owned domestic subsidiary Guangdong Mobile Communication Co.
China International Capital Corp was picked as the underwriter for the issue.
"The bond issue will result in a saving of interest payments by the group,'' said Wang Xiaochu, chairman of the company, in a statement.
China Mobile (HK) and its rival China Unicom (HK), which is also listed in Hong Kong and New York, have both said recently that they would like to go public on domestic stock markets.
China is now the world's second biggest mobile telecom market, and will soon surpass the United States to become No 1.
The rapidly developing telecom industry has become a field that domestic investors have for a long time wanted to get involved in, but have had no opportunity to enter.
"The bonds will receive a warm welcome in the domestic stock market as the telecom sector is still in a high growth period," said Sun Pengbo, a researcher with Huaxia Securities Co.
The country's mobile phone users exceeded 100 million by the end of March, statistics from the Ministry of Information Industry showed.
China Mobile (HK) had 51.6 million customers in 13 provinces, with its parent, China Mobile Communications Corp, controlling 78 per cent of the domestic market.
The company provides mobile telecom services in Guangdong, Zhejiang, Jiangsu, Fujian, Henan, Hainan, Hebei, Liaoning, Shandong provinces, Beijing, Shanghai and Tianjin municipalities and the Guangxi Zhuang Autonomous Region, through 13 wholly owned subsidiaries.
The parent of China Telecom (HK) said earlier this week that it was scheduled to provide 2.5 generation mobile telecom services in June, upgrading from the present second generation system.
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