China Tower invites pitches from banks for US$10b HK IPO

HONG KONG: China Tower Corp, which owns and manages the mobile phone towers for China’s three stateowned telecom operators, has invited investment banks to pitch for a role in a Hong Kong IPO worth up to US$10 billion (RM42.7 billion), IFR reported yesterday.

The IPO would take place in late 2017 or early 2018, said IFR, a Thomson Reuters publication, citing people close to the deal.

China Unicom Hong Kong Ltd, China Mobile Ltd and China Telecom Corp Ltd formed China Tower in October 2015 to save on infrastructure investment and cut management costs for their mobile phone towers.

The companies did not immediately reply to a Reuters request for comment on the China Tower IPO plans.

China Unicom’s 28.1% stake in China Tower accounts for about 46% of China Unicom’s market capitalisation, valuing the mobile phone tower owner at US$54 billion, IFR said, citing a Goldman Sachs report from April.

If China Tower were to sell a 1020% stake in the IPO, the deal could raise between US$5 billion and US$10 billion.

It would come on the heels of another giant IPO in Hong Kong from Sinopec Marketing Co Ltd, the fuels distribution unit of China Petroleum and Chemical Corp (Sinopec), that could raise US$12 billion later in 2017.

The two mega deals would be a boost to activity in Hong Kong, which has seen a 50% plunge in IPO volumes so far in 2017 compared with a year ago, Thomson Reuters data showed.

The city, which typically ranks among the world’s top two IPO destinations, has dropped to eighth in volume of new listings so far this year.

China Tower Corp was formed by the triumvirate of telco operators almost two years ago as a part of plans to save on infrastructure investments and reduce costs for managing mobile phone towers.