May 29, 2017 / 2:56 AM / 2 years ago

China Tower invites banks to pitch for role in up to $10 billion HK IPO: IFR

FILE PHOTO: A mobile phone tower is seen behind a man carrying a pick over his shoulder as he walks past an area that will soon be a construction site on the outskirts of Beijing April 25, 2011. REUTERS/David Gray/File Photo

HONG KONG (Reuters) - China Tower Corp, which owns and manages the mobile phone towers for China’s three state-owned telecom operators, has invited investment banks to pitch for a role in a Hong Kong IPO worth up to $10 billion, IFR reported on Monday.

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 (0762.HK), China Mobile Ltd (0941.HK) and China Telecom Corp Ltd (0728.HK) 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 percent stake in China Tower accounts for about 46 percent of China Unicom’s market capitalization, valuing the mobile phone tower owner at $54 billion, IFR said, citing a Goldman Sachs report from April.

If China Tower were to sell a 10-20 percent stake in the IPO, the deal could raise between $5 billion and $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) (0386.HK), that could raise $12 billion later in 2017.

The two mega deals would be a boost to activity in Hong Kong, which has seen a 50 percent plunge in IPO volumes so far in 2017 versus 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.

Reporting by Fiona Lau of IFR; Writing by Elzio Barreto; Editing by Edwina Gibbs and Himani Sarkar

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