Unicom to Acquire Assets from Unicom and Netcom Parents
China Unicom Press Release, 12/16/08
China Unicom (NYSE: CHU; 0762.HK; 600050.SH) has announced that its subsidiary, Unicom China, has agreed to purchase assets and businesses from Unicom's mainland-based China Unicom and China Netcom parent companies for a total price of RMB 6.43 bln. The assets and businesses in question include: the telecommunications business across the 21 provinces in Southern China (but not the underlying fixed assets); the local access telephone business and related assets in Tianjin Municipality operated by the Unicom Parent and the Netcom Parent and/or their respective subsidiaries and branches; the backbone transmission assets in Northern China owned by the Netcom Parent and/or its subsidiaries; a 100% equity interest in SIM and telephone card developer Unicom Xingye, which is owned by the Unicom Parent; a 100% equity interest in information network developer CITC, which is owned by the Unicom Parent; and a 100% interest in customer service and hotline company New Guoxin, owned by the Unicom Parent.
Once the purchase is complete, Unicom China will enter a lease agreement for the underlying southern network with the network owner Unicom New Horizons, a wholly-owned subsidiary of the Unicom Parent, paying a lease fee of RMB 2.0 bln and RMB 2.2 bln for the years 2009 and 2010 respectively, with payments made on a quarterly basis.
The deal is pending valuation and approval of assets from the State-owned Assets Supervision and Administration Commission (SASAC).
Keywords: restructuring New Guoxin Xingye CITC 0762.HK 600050.SH China Netcom China Unicom CHU SASAC telecom
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