Tech firms, state-backed funds in $12b China Unicom deal
State-owned telecom group China Unicom said it will raise RMB78 billion ($12 billion) from private and state investors – including domestic technology companies, Qianhai FoF and China Structural Reform Fund – in response to the government’s mixed-ownership reform policy.
Ten strategic investors will buy a collective 35.19% stake in Shanghai-listed unit China United Network Communication, a filing showed. The sale includes nine billion new shares and 1.9 billion existing shares from the parent Unicom Group. Each share is priced at RMB6.83. Upon completion of the deal, the parent’s shareholding in the listed unit will fall from 62.7% to 36.7%.
China Life Insurance will buy a 10.22% holding, while China Structural Reform Fund will purchase all of the existing shares, taking a 6.11% stake. Tencent Holdings, Baidu, and Alibaba will take 5.18%, 3.3% and 2.04% stakes, respectively. Other investors include JD.com, Suning Commerce Group, PE-backed ride-hailing app Didi Chuxing and renminbi fund-of-fund Qianhai FoF, according to the company’s presentation document.
The plan has been approved by the National Development and Reform Commission. China Unicom, the country’s third-largest telecom player, said it expects the investment “to further optimize its corporate governance structure in accordance with the market-oriented principles.”
The government has been encouraging private investment in state-owned enterprises (SOEs) as part of what it calls a mixed ownership model, with a view to enhancing private sector best practices without ceding government control. In the meantime, the China Structural Reform Fund was formed last year, with a focus on boosting SOE competitiveness. Initiated by China Chengtong Holding, the fund received initial capital of RMB131 billion from nine SOEs.
More on Greater China
Latest News
Asian GPs slow implementation of ESG policies - survey
Asia-based private equity firms are assigning more dedicated resources to environment, social, and governance (ESG) programmes, but policy changes have slowed in the past 12 months, in part due to concerns raised internally and by LPs, according to a...
Singapore fintech start-up LXA gets $10m seed round
New Enterprise Associates (NEA) has led a USD 10m seed round for Singapore’s LXA, a financial technology start-up launched by a former Asia senior executive at The Blackstone Group.
India's InCred announces $60m round, claims unicorn status
Indian non-bank lender InCred Financial Services said it has received INR 5bn (USD 60m) at a valuation of at least USD 1bn from unnamed investors including “a global private equity fund.”
Insight leads $50m round for Australia's Roller
Insight Partners has led a USD 50m round for Australia’s Roller, a venue management software provider specializing in family fun parks.