China Unicom’s Shanghai-listed unit clarified strategic investors will provide no more than CNY61.7 billion ($9.2 billion) of a total CNY78 billion it aims to generate through a private placement, as the company fleshed out the details of the plan following a green light from regulators.
State-owned China United Network Communications (CUNC) reported to the Shanghai Stock Exchange the operator will issue just over 9 billion shares to a group of 14 investors including Alibaba, Baidu, Tencent and state-owned China Life Insurance, Financial Times (FT) reported.
In a statement, the company confirmed it will raise a further CNY3.2 billion by offering 84.8 million shares to some employees, and another CNY12.9 billion through a transfer of 1.9 billion shares to the China Structural Reform Fund.
The private share placement cleared the final regulatory obstacle Sunday (20 August) after the country’s securities regulator said the mixed-ownership plan doesn’t violate rules. The China Securities and Regulatory Commission said in a statement it will “treat the private placement in China Unicom’s ownership reform as an exceptional case”. It said it reviewed the relevant legal procedures with the National Development and Reform Commission and other departments, Reuters reported.
Hong Kong-listed China Unicom announced last week, after a number of denials, it would raise funding by selling a 35 per cent stake in the company to a group of 14 strategic investors as part of the government’s mixed-ownership reform effort.
Shares of both companies resumed trading in Hong Kong and Shanghai today after they were suspended in the days before the 16 August announcement.
The Chinese government is eager to encourage private investment to improve the country’s telecoms infrastructure and fuel competition in the sector by reducing state ownership, but not control.