(Bloomberg) -- China Mobile Ltd., the country's largest wireless carrier by revenue, is set to raise $8.78 billion from its Shanghai listing, making it the world's second largest offering this year -- thanks in part to state support.
The state-run company, which was removed from the New York Stock Exchange earlier this year due to an investment ban ordered by former U.S. President Donald Trump, will exercise its over-allotment option for the offer due to strong demand from domestic retail and state investors, according a Shanghai bourse filing.
That would enable China Mobile to raise a total of 56 billion yuan from the sale, making it the world's second largest offering this year after electric pickup truck maker Rivian Automotive Inc.'s $13.7 billion IPO, Bloomberg data show. It would also become one of the 10 largest share offers for the nation's domestic stock market in a decade. Companies listing in mainland China had raised nearly a record $80 billion this year, up about 17% from 2020.
The A-share offer has attracted a total of 19 strategic investors, mostly state-owned entities including the National Council for Social Security Fund, China-Africa Development Fund, China Culture Industrial Investment Fund, National Integrated Circuit Industry Investment Fund, State Grid Yingda International Holdings Co., State Development & Investment Corp., China FAW Group Co., and state-run insurers like China Life Insurance Co. -- as well as the Brunei Investment Agency -- the filing shows.
The NYSE suspended trading in China Mobile in January, along with the Asian nation's other major state-owned operators, China Telecom Corp. and China Unicom Hong Kong Ltd. That development followed an order barring U.S. investments in Chinese companies the Trump administration deemed a threat to national security. China Telecom listed in Shanghai in August after raising more than $7 billion. China United Network Communications Ltd. is already trading on the exchange.
The strategic investors for China Mobile will pay 24.3 billion yuan for 49.9% of its planned A-share offer of 845.7 million shares ahead of exercise of the green shoe option, and they will be subject to lock-up period from 12 months to 36 months.
All of the over-allotment portion of the A-share offer, or 126.86 million shares, will be allocated to retail investors, according to the filing. Earlier this week, China Mobile said its A-share issue was 805.68 times covered from retail investors' subscription.
Proceeds from the listing in the Chinese financial hub will be used to fund 5G network expansion, cloud infrastructure, smart-living projects and tech development that will cost the company 157 billion yuan in total, China Mobile has said.
How 5G Will Change China (Beyond Faster Video Games): QuickTake
China International Capital Corp. and Citic Securities Co. are sponsors of China Mobile's A-share offer. The main underwriters include Huatai United Securities Co., BOC International (China) Co. and China Merchants Securities Co.
©2021 Bloomberg L.P.
With assistance from Bloomberg
Essential Business Intelligence, Continuous LIVE TV, Sharp Market Insights, Practical Personal Finance Advice and Latest Stories — On NDTV Profit.
