China Unicom has unveiled details of its plan to issue and transfer stock to private investors and its staff in a move that will raise about RMB77.9 billion (US$11.67 billion).
The move is part of the "mixed ownership reform plan" being introduced by the Chinese government that will allow state-owned Chinese companies to bring in private investment.
China Unicom Ltd. (NYSE: CHU) announced that its China United Network Communications Ltd. unit, which is listed on the Shanghai stock exchange, "entered into Framework Cooperation Agreements with Tencent, Baidu, Jingdong, Alibaba and others" on August 16, whereby new shares valued at $9.25 billion and existing shares valued at $1.94 billion will be sold to the private investors. In addition, shares valued at $481 million will be made available to staff in an "equity incentive scheme."
The operator plans to use the proceeds "for upgrading 4G capabilities, technology validation and enablement of 5G network related technologies, launch trial programs in relation to the 5G network and develop innovative businesses." (See China Unicom Completes 5G NR Field Test With ZTE, Huawei Tests 5G New Radio (NR) Tech in 3.5GHz Band and China Unicom, ZTE Team Up on 5G, IoT R&D.)
The news comes only days after Unicom announced dramatically improved net profits for the first half of the year. (See Unicom's Profit Soars as Private Investors Are Lined Up.)
In a separate announcement, Unicom also updated its subscriber statistics. At the end of July it had 270.7 million mobile customers, of which 145.2 million were 4G subscribers, and almost 77 million broadband customers, about 75% of which are hooked up to FTTH connections.
— Ray Le Maistre, , International Group Editor, Light Reading