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To: Boplicity who wrote (4261)	12/16/1999 11:52:00 AM
From: slacker711	Respond to of 13582

FOCUS-China Unicom IPO distant despite pacts By Matt Pottinger BEIJING, Dec 16 (Reuters) - China Unicom has signed or neared agreements with a handful of foreign partners to unwind telecommunications joint ventures banned by the government, state media and industry executives said on Thursday. But key foreign partners said they had made little progress in settlement talks with the number two state carrier, threatening further delays or a scaling back of Unicom's planned overseas stock listing. China Unicom vice-president Wang Jianzhou said several foreign partners had signed pacts to terminate controversial joint venture contracts, known as China-China-Foreign (CCF) projects, according to the China Daily. ''We have made some agreements and will pick up the pace to complete the deal with the rest of our foreign partners,'' the newspaper quoted Wang as saying. The report did not identify the partners, but U.S.-based Metromedia International Group (AMEX:MMG - news) Inc said this week that it would receive 807 million yuan ($97.5 million) from Unicom in exchange for its stake in mobile and fixed line networks. Unicom also announced an agreement in August with Nippon Telegraph and Telephone Corp , but it was unclear whether a pact had actually been implemented. About two dozen foreign companies have invested $1.4 billion in Unicom's mobile phone, paging and fixed line networks since the mid-1990s. To skirt a ban on overseas investment in the sector, the foreign firms set up joint ventures with Chinese middlemen which in turn invested in Unicom projects. Cash-starved Unicom initially welcomed the capital but the government declared the investment scheme ''irregular'' and ordered Unicom to buy out the partners. Most foreign companies have rebuffed the offers as inadequate, delaying Unicom's listing. LISTING SEEN NO EARLIER THAN Q2 Foreign executives said the recent settlements would do little to speed plans by Unicom for a stock listing -- already pushed to next April from an original target of last October. Key partners -- Bell Canada (Toronto:BI.TO - news), France Telecom , NexTel (NasdaqNM:NXTL - news) of the United States, Hong Kong-based CCT , and Deutsche Telekom and Siemens of Germany -- have yet to accept deals, executives said. ''For people with good projects, Unicom is still far off from what people expect,'' said an executive with a European partner. Those networks account for more than one-quarter of Unicom's 3.8 million mobile phone subscribers, and comprise some of China's fastest growing markets, including Shanghai, Tianjin, and the coastal provinces of Guangdong, Fujian and Shandong. Ownership of those markets would be crucial for Unicom to reach its listing target of $3-$5 billion, analysts said. ''It's going to be a much less attractive company without the mobile networks in those provinces,'' said Edison Lee of Credit Lyonnaise Securities Asia in Hong Kong. ''Of course they can list without them, but it would be a much lower valuation,'' he said. A source close to China Unicom said the company would push for a breakthrough with those companies by the end of the year, and had improved terms for settlement in recent weeks. ''We hope to have all the major ones wrapped up by the end of the year,'' he said. He said Unicom would see ''a multi-billion dollar'' listing even if a settlement could not be reached with those companies. He said Unicoom could include its extensive paging networks and expanding Internet backbone and services to sweeten the IPO. ''I don't think getting those incremental provinces will make that much of a difference,'' he said of the premium networks. Regardless, an offering was unlikely before April or May, he said. ($1 equals 8.279 Yuan)