China Mobile Prepares Shanghai Offering as U.S. Delisting Looms
China’s largest wireless telecom operator China Mobile Ltd. is planning a share sale in Shanghai, the company said Monday after it lost an appeal of a New York Stock Exchange decision to delist its shares.
China Mobile said it will sell as many as 964.8 million shares, or 4.5% of its total issued shares, on the Shanghai Stock Exchange at an undisclosed price. The offering may be expanded by 15% through an over-allotment “greenshoe” option, the company said in a filing with the Hong Kong stock exchange, where it is also traded.
The company’s Hong Kong-traded shares closed at HK$48.80 ($6.28) Monday, giving the company a market value of HK$999.2 billion.
The announcement followed a similar move by rival China Telecom Corp. Ltd., which said in March that it plans a Shanghai offering that could raise $4 billion.
China’s three state-owned telecom carriers — China Mobile, China Telecom and China Unicom — face U.S. delisting as they failed to reverse the NYSE decision amid signs that the Biden administration would maintain curbs on certain Chinese companies imposed under former President Donald Trump.
Trump in November signed an executive order barring U.S. entities from investing in companies believed by the government to have ties to the Chinese military. The order effectively prohibits American funds and individual investors from buying stocks in such Chinese companies.
China Mobile said it would use the proceeds from the Shanghai offering to develop its premium 5G networks and infrastructure for cloud resources, among other things.
China Mobile reported 198.4 billion yuan ($30.8 billion) of first-quarter revenue, up 9.5% from a year earlier. Net profit rose 2.3% to 24.1 billion yuan. As of March 31, the company had 940 million users, including 189 million users of its 5G services.
Contact reporter Han Wei (email@example.com) and editor Bob Simison (firstname.lastname@example.org)
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