China United plans to fund expansion
$543 mln rights offer to expand mainland network-reports
By CBS MarketWatch
Last Update: 11:38 PM ET June 28, 2004
TOKYO (CBS.MW) - China United Telecommunications plans to raise 4.5 billion yuan ($543 million) through a 3-for-10 rights offer to fund an expansion of the carrier's network on the mainland, according to published reports Tuesday.
NEWS FOR QCOM
China United plans $543 rights offer - reports
Lakes Entertainment, OraSure, more
Prices mixed; Lucent gains, SBC down
More news for QCOM
Quote & News Charts Financials Analysts Options SEC Filings
The Shanghai-listed company, which controls the smaller of China's two mobile phone operators, reportedly said it will sell 1.5 billion yuan-denominated Class A shares at 3 yuan a share beginning July 7, at a 12 percent discount to Monday's Shanghai closing price of 3.40 yuan.
China United, which first announced the plan back in April, will use the proceeds to buy an 8.26 pct stake in China Unicom (BVI), the controlling shareholder of New York- and Hong Kong-listed China Unicom (CHU: news, chart, profile) (HK:0762: news, chart, profile) from its parent, state-owned Unicom Group.
With the purchase, China United will raise its stake in China Unicom (BVI) to 82.09 percent. China Unicom (BVI), a private holding company registered in the British Virgin Islands, in turn owns 77.4 percent of China Unicom.
Unicom Group will then spend the money on expanding the group's two-year-old network which uses the U.S.' Qualcomm's (QCOM: news, chart, profile) code division multiple access technology (CDMA).
Unicom Group owns two mobile networks and leases them to the Hong Kong-listed unit. One network uses the global system for mobile communications standard, or GSM, and the other uses CDMA.
The CDMA network had only 23 million subscribers as of the end of May, compared with 77.7 million subscribers to its GSM network, and much less than rival China Mobile's (HK:941: news, chart, profile) 155.93 million subscribers to its GSM network, according to AFX.
One in four Chinese people will have a mobile phone by the end of the year, China's official Xinhua news agency reported earlier this month, as the world's most populous country consolidates its status as the largest mobile phone market. See full story.
marketwatch.com |
