China Unicom’s parent gets go-ahead for mixed-ownership plan

Alibaba and Tencent are expected to lead new private investors and get seats on the board of Shanghai-listed parent of the world’s sixth-largest mobile network operator, with 268.3 million subscribers as of May 31

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China Unicom has 268.3 million mobile subscribers. Photo: Reuters

Published: 6:30pm, 17 Jul 2017Updated: 10:33pm, 17 Jul 2017

Internet giants Alibaba Group Holding and Tencent Holdings are expected to be introduced next month as the first major private-sector stakeholders of a state-owned enterprise, following the approval of China United Network Communications’ so-called mixed-ownership reform plan.

The Shanghai-listed parent of China Unicom announced last Friday that its plan has been given the go-ahead by the National Development and Reform Commission, the central economic planning agency under mainland China’s State Council.

“That means the terms, the investors, the size of their equity stake and the amount of investments to be made have all been agreed upon by the various parties involved,” Jefferies equity analyst Edison Lee said on Monday.

“Unicom’s parent would be the first SOE to start undertaking this mixed-ownership reform scheme, while Alibaba and Tencent are expected to become the first domestic private-sector companies to get SOE board seats.”

Tencent along with Alibaba are reported to have jointly injected US$10 billion into Unicom’s parent, although there has been no official confirmation as yet. Photo: Reuters

The first phase of that reform plan will likely be formally unveiled in four weeks, Lee said.

Such a timeline was based on China United Network’s announcement last Friday that trading of its shares would not resume on Monday, but will be suspended for another month.