China Unicom shares soar on US$11.7 bln stake sale plan

SHANGHAI: Shares in China’s second-largest telecoms carrier Unicom soared yesterday after it reiterated previously retracted plans for an almost US$12 billion stake sale involving high-profile investors including Tencent, Baidu, and Alibaba.

China Uni ted Network Communications Ltd (CUNC), the Shanghai-listed arm of China Unicom, will sell shares worth 77.9 billion yuan ( US$11.7 billion) to 10 investors, according to a statement to the Shanghai exchange.

China Uni ted Network Communications shares, which were suspended since April as the ownership plan was being hashed out, jumped by the 10 per cent daily limit in Shanghai after the announcement. China Unicom shares in Hong Kong surged more than eight per cent.

The plans were first announced last week but, puzzlingly, were quickly retracted for “technical reasons”, leaving investors in limbo.

But they were re-released in the latest statement, unchanged and with no elaboration on the reasons for the earlier about-face.

The plan is part of the Chinese government’s push to overhaul inefficient state-owned enterprises ( SOEs) by luring in private capital.

The 10 strategic investors, who get their stakes at 6.83 yuan per share, will own 35.19 per cent of the Shanghai arm while Unicom remains as the company’s biggest shareholder.

An investment company linked to Tencent, which owns popular messaging app WeChat, will buy 5.33 per cent of the Shanghai-listed arm for 11 billion yuan with a state- owned partner. An arm of Chinese search- engine giant Baidu will take a 3.39 per cent stake for 7 billion yuan, also with a partner.

An investment company linked to e- commerce giant Alibaba’s founder Jack Ma will obtain a little over two per cent. — AFP