China United to launch nation's biggest public offering
( 2002-09-17 10:16 ) (1 )

China United Telecommunications Group - parent of Hong Kong-listed China Unicom Ltd - is to launch China's biggest public offering this year to raise 11.5 billion yuan (US$1.39 billion).

The company is to release a share issue prospectus in Tuesday's major securities newspapers.

China Unicom and its lead underwriter declined to comment but a Unicom executive said a news conference will be held this morning in Beijing. Many believe details concerning the IPO will be revealed at the briefing.

China Unicom, the country's second largest cellular phone carrier, said it has secured approval from the China Securities Regulatory Commission (CSRC), the watchdog of China's stock market, to sell 5 billion A shares at 2.3 yuan (28 US cents) per share.

The IPO price is much lower than the previous target of 4 yuan (48 US cents).

Analysts said the lower-than-expected IPO price will help cushion investor fears that the huge IPO will dent liquidity in the current sluggish stock market.

"The lower IPO price is good news for investors," said Wang Guoping, an analyst with China Galaxy Securities.

"If it is priced at 4 yuan, that would deal a much bigger blow to investor confidence.

"The IPO is crucial for China Unicom and the company has taken a prudent attitude in setting the IPO price as any misstep would make it lag far behind its rivals."

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