HONG KONG (Reuters) – Telecoms group China Unicom is raising $11.7 billion from about a dozen investors including tech giants Alibaba Group (BABA.N) and Tencent Holdings (0700.HK), as part of Beijing’s push for state-owned enterprises to be revitalized with private capital.
The deal represents the largest capital raising in the Asia-Pacific region since insurer AIA’s (1299.HK) 2010 market debut, as per Thomson Reuters data. It would also be the biggest deal in recent years under Beijing’s “mixed-ownership” reforms.
The Chinese government is seeking to rejuvenate state behemoths with private capital, with China Unicom among the first batch of state-owned enterprises slated for the mixed-ownership reforms, whose guidelines were issued in 2015.
The board of China Unicom’s Shanghai-listed unit, China United Network Communications Ltd (600050.SS), has approved an issue of shares to the investors, who also include Baidu (BIDU.O), JD.com (JD.O) and some other firms.
Investors will get a combined 35.2 percent stake in the Shanghai unit and will be allotted three board seats, the group’s Hong Kong unit, China Unicom Hong Kong (0762.HK), said on Wednesday.
Reuters had first reported about the fund raising plans in June.
Other major companies that have agreed to invest in China Unicom include insurer China Life Insurance (601628.SS), ride-hailing company DiDi Chuxing, and Shenzhen-based Chinese technology conglomerate Kuang-Chi Group.
“The mixed ownership will raise the innovation capability of the company … allowing us to transform from a traditional operation to an integrated operator,” said Lu Yimin, president of China Unicom Hong Kong.
The deal is expected to be completed by end of the year, he said.
China Unicom group, formally known as China United Network Communications Group Co Ltd, is one of the world’s largest mobile carriers by user numbers but has faced a fiercely competitive market.