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China Telecom Corp. Ltd., a listed company on both Hong Kong and New York stock exchanges, will purchase from its parent company, China Telecom Group, China's largest fixed-line operator, a considerable part of the business for 46 billion Yuan (US$5.5 billion), reported Wednesday's Economic Information Daily.
Upon completion of the deal, the number of clients of the China Telecom Corp. Ltd. will reach 110 million and the payoff of each share is likely to increase by 20 percent, making it more lucrative overseas investors, according to insiders.
The part of business to be sold includes fixed-line, data, Internet and other telecommunications services in Anhui, Fujian, Jiangxi and Sichuan provinces, Chongqing municipality and the Guangxi Zhuang Autonomous Region.
Following the initial payment of 11 billion Yuan (US$1.3 billion) in cash, the remaining 35 billion Yuan (US$4.2 billion) will be paid within a period of 10 years, according to the report.
The corporation successfully raised 1.52 billion US dollars when listed in both Hong Kong and New York in November last year and the assets listed include the group's assets in Shanghai and Guangdong, Jiangsu and Zhejiang provinces. Its parent company, the China Telecom Group, has a 69.5 percent stake.
According to the report, the share prices for China's three major telecommunications operators -- China Mobile, China Unicom and China Telecom all saw hikes in the Hong Kong stock exchange in the previous month, and the price for China Telecom reached a record high of 2.4 HK dollars since listing.
(Xinhua News Agency October 29, 2003)
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