- China Unicom (CHU.NYSE) has recently announced plans to raise RMB 78 billion by issuing new A-shares, as reported by Tencent Finance.
- Through the fundraising, China Unicom plans to introduce multiple non-state-owned strategic investors.
- New strategic investors will subscribe for 9.037 billion new A-shares and acquire 1.9 billion existing A-shares from China Unicom Group at a price for both of RMB 6.83 per share.
Why It Matters:
- Tencent Holdings (0700.HK), Baidu Inc. (BIDU.NASDAQ), Alibaba Group (BABA.NYSE), and JD.COM (JD.NASDAQ), which were widely expected to participate in China Unicom’s mixed-ownership reform, are now confirmed among the new investors. After the deal, the four companies will respectively own 5.18%, 3.30%, 2.04%, and 2.36% of China Unicom’s A-shares.
- In addition, China Life Insurance (LFC.NYSE/601628.SS/2628.HK), Chinese O2O firm Suning Commerce Group (002024.SZ), CRRC Corp Ltd(601766.SS/1766.HK), Shanghai Wangsu Science & Technology Co. (300017.SZ), and Chinese taxi-hailing app Didi Chuxing are also among the new strategic investors in China Unicom.
- After the deal, China Unicom Group will hold 36.67% of China Unicom’s A-shares, and all new strategic investors combined will hold a total of 35.19%.