Unicom clears key listing hurdle as Bell, AIG terminate contracts
China United Telecommunications (China Unicom) has reached agreements with Bell Canada and American International Group (AIG) to annul two mainland mobile-phone joint ventures, paving the way for its US$3 billion overseas listing later this year.
Sources said yesterday the two ventures, worth $50 million, were located in the northeastern province of Shandong.
The latest accords by the mainland's second-largest telecom operator follows an in-principle agreement with SAR-listed CCT Telecom Holdings to unwind similar ventures - controversial China-China-foreign (CCF) joint-venture contracts that fell foul of Beijing law.
So far, China Unicom has terminated CCF ventures with foreign partners in 10 provinces and cities. It has also reached in-principle agreements to terminate contracts with foreign partners on another 20 CCF ventures.
Sources said they were confident China Unicom's dual listing in Hong Kong and New York would take place in the second quarter after the substantial progress made on CCF contracts.
They said China Unicom's listing vehicle would incorporate more than 20 mobile-phone joint ventures in 12 mainland cities; long-distance fixed-line operations and data communications services.
More than 20 foreign companies have invested $1.4 billion in more than 40 joint ventures with China Unicom, mostly to operate mobile-phone networks.
Foreign investment is banned in the mainland telecom sector but investors skirted this by first setting up joint ventures with mainland companies, which then invested in China Unicom mobile-phone ventures.
The company late last year outlined a five-year plan to capture 30 per cent of the mainland mobile-phone and Internet services markets in the next five years.