China Telecom Group, parent of Hong Kong-listed China Telecom, is seeking to offload 30 per cent of its wholly owned hotel subsidiary as it sets about acquiring a mobile network from China Unicom Group for 66.2 billion yuan (HK$75.05 billion).
The mainland's largest fixed-line operator is putting up a 30 per cent stake in Tong Mao Hotel Holdings for sale with an asking price of 731 million yuan, according to a notice in the China Beijing Equity Exchange.
Tong Mao is involved in hotel and property management with net assets of 1.843 billion yuan and operating 11 hotels in seven provinces as of last year.
Of the Tong Mao hotels, six are of four stars in Shanghai, Nanjing, Yangzhou, Jiejiang, Hefei and Guangxi, three are of three stars in Jiejiang and Shaanxi, and two are of five stars in the Xinjiang Autonomous Region.
The notice said Tong Mao generated 9.19 million yuan net profit and 683 million yuan revenue last year. It was debt-free.
China Telecom Group's stake in Tong Mao could be diluted further once the buyer injects capital into the company after the deal. 'The minimum amount of capital injection is 907.78 million yuan and China Telecom Group will hold 51 per cent stake in Tong Mao while the buyer will hold 49 per cent stake,' the notice said.