China Telecom has staged a dramatic relaunch of its controversial initial public offering (IPO) by slashing the offer size 55 per cent in a last-ditch attempt to ensure sufficient demand to fill the book.
Due to time constraint, the fixed-line giant and its underwriters have chosen the easiest way to keep the issue alive, keeping intact the offer price range and dividend payout ratio.
China Telecom will issue 7.55 billion H shares to Hong Kong and international investors, sharply down from the 16.8 billion shares it had planned to sell.
The offer price is unchanged at HK$1.47 to HK$1.69 (with brokerage commission, it would be HK$1.48 to HK$1.71) while dividend payout stays at 6.5 HK cents.
Gross IPO proceeds are cut to between HK$11.18 billion and HK$12.92 billion, down from the previous target of HK$24.86 billion and HK$28.7 billion.
China Telecom's enlarged public float will be slashed to 10.05 per cent from 20.1 per cent.
Because of the smaller number of shares to be issued, China Telecom's prospective earnings multiples will be slightly enhanced to between 9.6 and 11.4 times.
