Shares in China’s second-largest telecoms carrier Unicom soared Monday after it reiterated previously retracted plans for an almost $12 billion stake sale involving high-profile investors including Tencent, Baidu, and Alibaba.
China United Network Communications Ltd (CUNC), the Shanghai-listed arm of China Unicom, will sell shares worth 77.9 billion yuan ($11.7 billion) to 10 investors, according to a statement to the Shanghai exchange.
China United Network Communications shares, which were suspended since April as the ownership plan was being hashed out, jumped by the 10 percent daily limit in Shanghai after the announcement. China Unicom shares in Hong Kong surged more than eight percent.
The plans were first announced last week but, puzzlingly, were quickly retracted for “technical reasons”, leaving investors in limbo.
But they were re-released in the latest statement, unchanged and with no elaboration on the reasons for the earlier about-face.
The plan is part of the Chinese government’s push to overhaul inefficient state-owned enterprises (SOEs) by luring in private capital.
The 10 strategic investors, who get their stakes at 6.83 yuan per share, will own 35.19 percent of the Shanghai arm while Unicom remains the company’s biggest shareholder.
An investment company linked to Tencent, which owns popular messaging app WeChat, will buy 5.33 percent of the Shanghai-listed arm for 11 billion yuan with a state-owned partner. An arm of Chinese search-engine giant Baidu will take a 3.39 percent stake for 7 billion yuan, also with a partner.
An investment company linked to e-commerce giant Alibaba’s founder Jack Ma will obtain a little over two percent.
Other investors include e-commerce company JD.com, state-owned China Life Insurance, and Suning Commerce Group, whose parent owns the AC Milan football club.
Unicom Group was among six SOEs chosen by Beijing last year for a pilot program to funnel private capital into state firms, which has seen Unicom-related shares soar this year.
Unicom’s net debt has risen 20 percent in the past five years to 150 billion yuan, according to Bloomberg News, as it spent on mobile network upgrades while also planning an expensive 5G rollout expected to benefit the Chinese tech giants.