BEIJING, Aug. 28 (Xinhua)-- China Unicom, the country’s second-largest telecom operator on August 16 had published a mixed ownership reform plan to introduce private investment mainly by issuing shares to strategic investors for raising totaling 78 billion yuan.
According to an announcement released on official website of China Unicom (Hong Kong), its strategic investors will subscribe approximately 9 billion A-share of China Unicom via private placement plan and purchase 1.9 billion shares of Unicom A share Company held by China Unicom Group Corporation, which altogether account for 35.2 percent of the issued capital stock after expansion, at a price of 6.83 yuan per share.
In addition, Unicom A Share Company proposes to initially issue to its core employees, pursuant to an equity incentive scheme, not more than approximately 850 million restrictive shares of Unicom A share Company, raising funds of not more than approximately 3.213 billion yuan.
Wang Xiaochu, chairman with China Unicom introduced that these strategic investors are expected to include large Internet companies, leading vertical companies in the industry, industrial groups and financial enterprises with solid strength and leading domestic industrial funds, such as Tencent, Baidu, Alibaba and JD, ChinaNetCenter, CRRC, China Life, Suning Commerce Group and Eastone Century.
According to the plan, Unicom Group’s shareholding in Unicom A Share Company will be approximately 36.67 percent, and China Life Insurance Company Limited, Shenzhen Tencent Cinda Limited Partnership, Ningbo Meishan Free Trade Port Area, Baidu Peng Huan Investment LLP, Suqian Jingdong Sanhong Management Limited Partnership, Hangzhou Ali Venture Capital Co., Ltd., Suning Commerce Group Co., Ltd., Shenzhen Kuangchi Connection Technology Investment Limited Partnership, Shenzhen Huaihai Ark IT Investment Fund LLP, Aegon-Industrial Fund Management Co. Ltd. and China Structural Reform Fund Corporation Limited will hold approximately 10.22 pct, 5.1 pct, 3.30 pct, 2.36 pct, 2.04 pct, 1.88 pct, 1.88 pct, 1.88 pct, 0.33 pct, 6.11 pct, respectively of the equity interests in Unicom A Share Company, representing an aggregate shareholdings of approximately 35.19 pct in Unicom A Share Company, resulting in a diversified shareholding base in Unicom A Share Company.
The announcement showed that China Unicom will properly introduce new shareholder representatives to serve as A-share company directors, to further optimize the composition and structure of the diversified board, strengthen the power of the board in major decision making, talent selection, employment, and salary distribution, improve the capacity building of the management, and explore the market-based mechanisms for recruiting managers and for managing operations.
China Unicom’s mixed ownership reform plan has been paid much attention by the public. On April 5, China Unicom (Hong Kong) Limited officially disclosed the progress of the plan and said that China Unicom Group was planning and promoting the major events related to the mixed ownership reform. In such major events, the controlling shareholder China Unicom A-share Company will serve as the platform and may involve share changes of the A-share Company. On July 24, China Unicom (Hong Kong) Limited announced that the pilot plan for the mixed ownership reform had been approved. The China Unicom A-share Company is negotiating with the potential investors, and the list of related investors, investment amount and shareholding ratio have yet to be reported to the competent departments for approval before its implementation.
It is generally believed that the official release of China Unicom’s mixed ownership reform plan has great significance.
On one hand, by introducing strategic investors, China Unicom will receive huge amounts of money to lay a foundation for future development, especially for the 5G network construction and operation. On the other hand, this move can help narrow the industrial gap between China Unicom and China Mobile, the country’s largest telecom operator by subscribers, further promote competition in the domestic telecommunication industry and hence is conducive to its overall development. Moreover, this plan can also provide ideas for the future reform of state-owned enterprises and is likely to build pilot experience later on so as to get further promoted in more industries. (Edited by Ma Xin, maxin11@xinhua.org)
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