China Unicom resumes trading after private placement cleared

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China Unicom on Monday resumed trading and opened higher in Shanghai and Hong Kong, after China's securities regulator cleared its private placement deal, removing the market uncertainties and confusions caused by its trade suspension on Wednesday.

Late on Sunday, the Shanghai-listed unit of the telecoms group announced that it plans to raise 61.73 billion yuan (9.25 billion US dollars) in a private placement to ten strategic investors, including tech giants Alibaba Group, Tencent Holdings and Baidu, as part of Beijing's push to draw private capital into state-owned enterprises (SOEs).

China Unicom is among the first batch of six SOEs slated for "mixed-ownership" reforms picked by the state planner.

VCG Photo

After the issuance, private investors will hold a total of 35.19 percent of shares, only slightly lower than China Unicom's holding of 36.67 percent.

Though the deal will exceed the country’s limits on private share sales, the China Securities Regulatory Commission (CSRC) said it will waive the phone carrier from the restrictions as the transaction is significant to China’s efforts to reform its SOEs.

The company had on Wednesday announced the same plan. But it then withdrew the announcement and issued a statement later that day saying that a trading halt on the stock would continue for another three trading days “for technical reasons” pending the release of further information on its placement plan, which made the deal mired in confusion until Sunday.

China’s National Development and Reform Commission also picked China Southern Power Grid Co., Harbin Electric Corp., China Nuclear Engineering, China Eastern Air Holding Co. and China State Shipbuilding Corp. to take part in the pilot program for mixed-ownership reform. The idea of infusing private capital is meant to help bring in the expertise needed to make state firms more efficient.