Tuesday, 26 September 2017

China Unicom shares suspended, new investors to be unveiled imminently

By Nick Wood, Total Telecom
Wednesday 16 August 17

Online giants Alibaba, Baidu, JD.com, Tencent reportedly among tech firms set to plough $12 billion into operator.

Trading in China Unicom shares was halted on Wednesday ahead of the expected unveiling of a raft of new investors in the company. In a brief statement, China Unicom said its shares were suspended "pending the release of an announcement containing inside information of the company…

Trading in China Unicom shares was halted on Wednesday ahead of the expected unveiling of a raft of new investors in the company.

In a brief statement, China Unicom said its shares were suspended "pending the release of an announcement containing inside information of the company."

Sources cited by Reuters last month claimed that a group of Chinese tech giants that includes search company Baidu, e-commerce providers Alibaba and JD.com, and Internet company Tencent, are set to jointly invest US$12 billion (€10.3 billion) in Unicom's Shanghai-listed unit, China United Network Communications.

It is understood that the majority of the capital will be raised by Unicom issuing new shares and by selling a stake in its Shanghai unit.

Amid mounting speculation, China Unicom has maintained that it is still negotiating with potential investors and insisted that it has not entered into any binding agreements.

That looks set to change with Wednesday's share suspension.

It is hoped that fresh capital will breathe new life into China Unicom, which has struggled recently to keep pace with China Mobile and China Telecom. Late last week, the company issued a first-half revenue warning, and said its second-half performance will come under pressure from intensifying competition.

Unicom is among a number of state-owned enterprises (SOEs) included in the government's mixed-ownership reform programme, which aims to improve their efficiency by diversifying their ownership structures.

China Unicom is still the second-largest of the country's three MNOs, with 269.45 million mobile subscribers at the end of June. Third-placed China Telecom has 229.85 million, while market leader China Mobile has 866.51 million.

However, when it comes to higher-paying 4G customers, China Unicom sits firmly in last place, with 138.81 million compared to China Telecom's 152.02 million, and China Mobile's 593.65 million.

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