What tryhard81 was eluding to? <vbg>
China Telecom plans US$6-7 bln IPO in 2001-sources
By Alison Leung
HONG KONG, Dec 5 (Reuters) - China's fixed-line telephone giant, China
Telecommunications (Group) Co, will seek an overseas listing next year with a target to raise
about US$6-7 billion (HK$46.8-54.6 billion), a record size for an initial public offering in
Asia ex-Japan, merchant banking sources said.
If the planned deal proceeds, it would surpass the record set in June by wireless and paging
group China Unicom Ltd's US$5.65 billion IPO. NTT Docomo's US$18 billion flotation in
1998 remains the high-water mark for all Asian IPOs including Japan.
China Telecom plans for a dual listing in Hong Kong and New York next year and merchant bankers will present their
proposals to the company next week in Beijing, one source said.
``The deal is very big so there may be more than two co-ordinators or sponsors,'' he said.
To sweeten the offering for international investors, China Telecom is expected to be awarded a mobile phone licence, making it
the mainland's third major carrier after China Mobile (Hong Kong) Ltd and China Unicom.
``It is almost for sure that China Telecommunications will get a mobile phone licence in China, otherwise the deal will be
lacklustre,'' the source added.
MOBILE AMBITIONS
China Telecom already is operating unofficial wireless phone systems that piggyback onto its fixed line networks in rural areas
and some small cities in western China that deeply undercut China Mobile and China Unicom prices.
In August, industry sources said the company already had more than one million customers and may have enough capacity to
take 10 percent of the national wireless market.
China Telecom was previously the parent company of China Mobile, but in a major reorganisation completed in March, those
ties were cut and control of China Mobile was transferred to a separate state-owned firm called China Mobile (Group) Co.
China Telecom in August hired away Li Ping, the former chief operating officer of China Mobile (Hong Kong), in a move that
analysts said would bolster its capital-raising efforts. Li helped oversee China Mobile's US$4.2 billion initial public offering in
1997 and a US$2 billion secondary offering in 1999.
LONG PREPARATION TIME
The source said it will take at least six to nine months for China Telecom to prepare for the dual listing.
Goldman Sachs (Asia), Morgan Stanley, Merrill Lynch, Salomon Smith Barney, Morgan Stanley Dean Witter & Co, China
International Capital Corp (CICC), BOCI Asia Ltd are all expected to compete for the deal, sources said.
State-owned China Telecom currently has a stranglehold over China's fixed-line telephone and long-distance call market but
Beijing is determined to introduce competition.
China Unicom's parent, China Unicom Group, operates a small fixed-line network in a handful of cities. More significantly, on
Sunday, China's Ministry of Railways was awarded a licence to turn its internal telecoms network into a commercial system that
will compete with China Telecom.
On Tuesday, Ministry of Information Industry chief Wu Jichuan confirmed the licence award to the railway ministry at a
telecoms industry conference in Hong Kong.
China Railway Telecom, known as Railcom, already provides telephone services to some one million people, mostly railway
workers and their families, on a network spanning 120,000 km (75,000 miles) and connecting 500 cities.
Railcom officials have said the network is slated to merge in three years with China Unicom Group. |
