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CHINA'S No. 2 mobile telecommunications carrier, China
Unicom, launched a domestic initial public offering (IPO) in
Shanghai yesterday intended to raise 11.5 billion yuan
(US$1.39 billion).
The long-expected IPO is the first by an overseas-listed
company of so-called "A shares,'' yuan-denominated shares
available only to Chinese investors. The listing could pave
the way for other Chinese companies listed overseas, or "red
chips,'' to raise money back home.
China Unicom Ltd., the Hong Kong and New York-listed unit
of the mainland parent China Unicom Group, announced yesterday
that the China Securities Regulatory Commission, Beijing's
stock market watchdog, had approved a sale by its holding
company, China United Telecommunications Corp. Ltd., of 5
billion A shares at 2.3 yuan per share.
The lower-than-expected IPO price, down from an original
target of 4 yuan per share, could help calm investor fears
that the huge listing might add to a glut of shares in the
market. Share prices in the mainland's two markets, in
Shanghai and Shenzhen, have been declining for weeks on fears
of an oversupply of shares due to new listings.
The offering by state-owned China Unicom Group is the
second largest ever for China, after last year's listing by
China Petroleum & Chemical Corp., or Sinopec Corp., which
raised 11.8 billion yuan.
After the listing, Unicom group will retain a 74.6
percent stake in China United Telecoms Corp. Ltd., keeping
ultimate control over the company, according to a copy of the
listing prospectus posted on the Web site of the Hong Kong
Stock Exchange.
China Unicom will use funds raised through the IPO to buy
the shares of China Unicom (BVI) Ltd., a British Virgin
Islands-registered subsidiary of the Unicom Group.
Unicom Group will then use the proceeds from that sale to
fund construction of its CDMA, or code division multiple
access network, the prospectus said.
Earlier this year, China Unicom reported it held a 28.5
percent share in the mainland Chinese cell phone market.
(SD-Agencies) | 
