July 12 -- China Tower, the state-owned wireless infrastructure operator, has begun final preparations for an initial public offering in Hong Kong that is slated to be the city’s largest in eight years.
China Tower aims to raise from USD8 billion to USD10 billion, valuing it at between CNY218 billion (USD32.7 billion) and CNY340 billion, an insider at the Beijing-based company told Yicai Global. China International Capital and US-based Goldman Sachs are advising the company, which has begun its roadshow.
The offering could be the Hong Kong stock exchange’s biggest since 2010 when life insurer AIA Group raised USD20.4 billion.
China Tower’s “listing is in progress and will be confirmed as soon as the end of this month,” the insider said. It filed for an IPO with the bourse on July 9.
After going public, the company needs to seek new sources of profit growth beyond its traditional telecom service partners, Fu Liang, an expert on the telecoms sector, told Yicai Global. Some 99 percent of the firm’s revenue comes from China’s three state telecom giants -- China Mobile, China Unicom and China Telecom -- whose joint venture it is. The IPO funds may go toward exploring new business opportunities.
The checks and balances among its three owners and the further dilution of their stakes in China Tower will give the company more business independence, Fu said.
China Tower, the world’s largest telecom tower provider, was set up in 2014 to save costs at its founders through shared infrastructure building. It mainly works in construction, maintenance and operation of base station auxiliary facilities such as telecom towers, public networks in high-speed trains and metros, as well as large indoor distribution systems.
Its original remit puts the company in a bind. It needs to both help its owners save money, while also generating profits for them, China Tower President Tong Jilu said on a previous occasion.