Once their asset disposals are completed, China Mobile’s stake in China Tower will be at 38 per cent, Unicom’s 28.1 per cent and China Telecom’s 27.9 per cent.
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Following earlier moves (and moves yesterday) in Hong Kong, the big three Chinese telecoms are up in US trading after a reorg saw China following through on putting 231.4B yuan (about $36B) of infrastructure into a towers spinoff. China Tower will operate, manage and maintain the collective towers assets of the three operators, who will lease back access rights for the towers. State-owned China Reform Holding Co Ltd will own 6 percent after it subscribes to new shares of China Tower Corp.
China Unicom will transfer 63.2 billion tower assets for 28 percent stake and 25.4 billion yuan in cash.
The telcos formally agreed to establish the new company, originally named China Communications Facilities Services Corporation Limited but now called China Tower, in July 2014. The telecom operator expects to get 19.5 billion yuan premium on the book value of its assets, including 12.1 billion yuan to be recorded in this year’s financial book. China Telecom slid 0.49 per cent to close at HK$4.08.
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Barclays estimated a total of 1.5 million towers, along with related assets like plant rooms and ancillary equipment, were involved in the transaction, which will be paid for by China Tower in shares and cash. China Telecom will sell 34.34 billion yuan assets in exchange for cash and 37.47 billion shares worth one yuan apiece, the two operators said in the statement.
