Wednesday, March 20, 2019
Martin Hennecke

China Tower files for HK flotation
China Tower, the state-owned wireless infrastructure operator, filed for an initial public offering in Hong Kong that could match the city's biggest since 2010. While the world's largest telecom tower service provider didn't give a fund-raising target or proposed timing of the sale in its filing dated Monday, the IPO may raise about US$10 billion (HK$78 billion), people with knowledge of the matter said last June. The Beijing-based company reported a profit of 1.9 billion yuan last year. China Tower was formed by combining the transmission facility assets of China Mobile, China Unicom Hong Kong and China Telecom in 2015 as part of a broader plan to improve state-owned enterprises by attracting private investors to them. Each of the state-owned carriers holds a stake in the tower company and pays leasing fees to use its facilities. A planned Xiaomi sale and the China Tower IPO may add up to US$20 billion, surpassing last year's total for initial share sales, according to data compiled by Bloomberg. Xiaomi was the first company to file for IPO with a weighted-voting rights structure after the city's exchange changed rules last month. The electronics maker may raise at least US$10 billion in the share sale, people familiar with the matter have said. Companies raised about US$16.6 billion through IPOs in Hong Kong last year, the data shows. The most recent sale for more than US$10 billion was AIA Group's 2010 offering at about US$20.4 billion. China International Capital and Goldman Sachs Group are joint sponsors for the planned China Tower share sale. Secretary for Financial Services and the Treasury James Henry Lau said that China Tower's IPO could compete with Xiaomi' s listing. Meanwhile, Two Chinese bitcoin mining equipment makers plan to raise up to US$1 billion each from Hong Kong listings this year, riding on the global boom in cryptocurrencies, IFR reported yesterday, citing people familiar with the plans. Canaan Creative filed a listing application to the Stock Exchange of Hong Kong on Monday. Zhejiang Ebang Communication has also started working with advisers on a proposed Hong Kong float of up to US$1 billion. Elsewhere, the private equity owners of Belle International Holdings, the biggest women's shoe retailer in China, are considering a spinoff of its sportswear distribution business. Hillhouse Capital and CDH Investments, are weighing a Hong Kong IPO of the unit as soon as next year. A listing could raise about US$1 billion. The business sells brands including Adidas, Nike and Puma in China, according to Belle's website. Deliberations on a possible listing of the unit are at an early stage, and Belle's owners including management may decide against a spinoff.

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