Bloomberg News
Thu, December 23, 2021
(Bloomberg) -- China Mobile Ltd., the country’s largest wireless carrier by revenue, is set to raise $8.78 billion from its Shanghai listing, making it the world’s second largest offering this year -- thanks in part to state support.
The state-run company, which was removed from the New York Stock Exchange earlier this year due to an investment ban ordered by former U.S. President Donald Trump, will exercise its over-allotment option for the offer due to strong demand from domestic retail and state investors, according a Shanghai bourse filing.
That would enable China Mobile to raise a total of 56 billion yuan from the sale, making it the world’s second largest offering this year after electric pickup truck maker Rivian Automotive Inc.’s $13.7 billion IPO, Bloomberg data show. It would also become one of the 10 largest share offers for the nation’s domestic stock market in a decade. Companies listing in mainland China had raised nearly a record $80 billion this year, up about 17% from 2020.
The A-share offer has attracted a total of 19 strategic investors, mostly state-owned entities including the National Council for Social Security Fund, China-Africa Development Fund, China Culture Industrial Investment Fund, National Integrated Circuit Industry Investment Fund, State Grid Yingda International Holdings Co., State Development & Investment Corp., China FAW Group Co., and state-run insurers like China Life Insurance Co. -- as well as the Brunei Investment Agency -- the filing shows.
The NYSE suspended trading in China Mobile in January, along with the Asian nation’s other major state-owned operators, China Telecom Corp. and China Unicom Hong Kong Ltd. That development followed an order barring U.S. investments in Chinese companies the Trump administration deemed a threat to national security. China Telecom listed in Shanghai in August after raising more than $7 billion. China United Network Communications Ltd. is already trading on the exchange.
The strategic investors for China Mobile will pay 24.3 billion yuan for 49.9% of its planned A-share offer of 845.7 million shares ahead of exercise of the green shoe option, and they will be subject to lock-up period from 12 months to 36 months.
All of the over-allotment portion of the A-share offer, or 126.86 million shares, will be allocated to retail investors, according to the filing. Earlier this week, China Mobile said its A-share issue was 805.68 times covered from retail investors’ subscription.
Proceeds from the listing in the Chinese financial hub will be used to fund 5G network expansion, cloud infrastructure, smart-living projects and tech development that will cost the company 157 billion yuan in total, China Mobile has said.
China International Capital Corp. and Citic Securities Co. are sponsors of China Mobile’s A-share offer. The main underwriters include Huatai United Securities Co., BOC International (China) Co. and China Merchants Securities Co.
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