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To: Ruffian who wrote (11026)	5/29/2000 5:11:00 PM
From: NinjaDancer	Respond to of 13582

May 30, 2000 -------------------------------------------------------------------------------- China Unicom Plans Dual IPO To Raise $4 Billion Next Month By PETER WONACOTT Staff Reporter of THE WALL STREET JOURNAL HONG KONG -- In one of China's most closely watched stock deals, the country's second-largest telephone company unveiled plans to raise about $4 billion in an initial public offering through a dual listing in New York and Hong Kong next month. China Unicom Ltd., the unit set up for the IPO by China United Telecommunications Corp., embarked on a global roadshow Monday when it presented details of the issue to Hong Kong-based institutional investors. Following the $2.9 billion stock sale of oil giant PetroChina Ltd., Unicom is the latest example of how Beijing is looking to restructure key state-owned firms through huge overseas stock offers. The results are starting to ripple across entire industries, spurring competition and growth. Demand Could Be Strong Unicom's IPO could also end up as one of Asia's biggest. According to company documents released to institutional investors Monday, Unicom will aim to place 2.46 billion shares with investors at between 11.50 Hong Kong dollars and 14.50 Hong Kong dollars (US$1.48 and US$1.86) each. Assuming a price in the middle of that range, Unicom says it expects about $3.98 billion in proceeds. The offer includes American depositary shares that will be sold in North America, Europe and Asia. If strong demand for the offering leads to an overallotment option being exercised, that figure could rise to $5.27 billion, beating the $4.2 billion offer three years ago of China Telecom (Hong Kong) Ltd. Final pricing for Unicom's issue is expected June 16, with the stock's debut slated for the next week. One of the main selling points for the Unicom offer is its sharp discount to the Hong Kong-listed shares of China Telecom, which rose 7.1%, or HK$3.45, to HK$52.25 on Monday. "Unicom's offering price is not outrageous," said a fund manager who met with Unicom executives Monday. "The deal should go well." Since Unicom was set up in 1994, however, it has labored under the shadow of China Telecom, the country's former phone monopoly. Unicom's struggle to win mobile-phone market share, for example, prompted the government to allow it to offer discounts that China Telecom wasn't allowed to match. Partly as a result, Unicom's cellular subscriber base rose 250% last year, but it still claims only 14% of the total market. Tough Competition Unicom is also competing intensely for long-distance telephone calls and Internet access, two markets that China Telecom -- which had been the sole provider -- continues to dominate. Unicom has been granted the rights to develop CDMA -- or code division multiple access -- technology, a cellular standard that will serve as the base for developing a new third generation of mobile phones. Unicom's prospectus says it has the option to acquire the CDMA license from its parent. For now, Unicom operates its mobile networks on a different technology called GSM, or global system for mobile communications, which is based on the pan-European standard. Unicom's stock offer is supposed to support a broader $12 billion business-expansion plan. But the main challenge, some analysts say, will be pulling disparate businesses together at a time of aggressive growth. "Even its mobile-phone service gives the impression of being unwieldy," Joe Zhang, Hong Kong-based head of research for Warburg Dillon Read, said in a January report on Unicom. "Its service standards and fee structure, not to mention ownership, vary enormously from city to city." Write to Peter Wonacott at peter.wonacott@awsj.com