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CITIC Networks to Sell 50% Stake in Great Wall Broadband

Wccdaily.com.cn, 11/19/11

According to the China Beijing Equity Exchange (CBEX) website, CITIC Networks plans to sell a 50% stake in Great Wall Broadband Network Service and RMB 480 mln in outstanding loans to Great Wall Broadband for RMB 1.08 bln. The purchaser must have a value-added telecom service operating license covering at least 15 cities in three or more provinces. Besides China's three major telecom operators - China Mobile (NYSE: CHL; 0941.HK), China Telecom (NYSE: CHA; 0728.HK), and China Unicom (NYSE: CHU; 0762.HK; 600050.SH) - other potential acquirers include cable TV network operators, Chengdu-based hotel video information and city community broadband network service provider Unionfriend Network (000693.SZ), and Chengdu-based telecom services provider Dr. Peng Telecom & Media Group (600804.SH).

Great Wall Broadband has RMB 900 mln in registered capital, RMB 3.5 bln in total assets and RMB 2.8 bln in total debts (for a debt-asset ratio of 80%), and recorded RMB 1.3 bln in revenue and RMB 11.56 mln in profit in 2010.

Keywords: divest regulation broadband license profit revenue telecom CITIC Networks Great Wall Broadband China Beijing Equity Exchange

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