Cornerstones take

16pc of China Tower’s $8.7bln HK IPO

Ag Reuters

HONG KONG: China Tower, the world’s largest telecoms tower operator, has lined up $1.4 billion from 10 cornerstone investors for its Hong Kong IPO of up to $8.7 billion, in what would be the world´s biggest listing in four years, people close to the deal said.

The Beijing-based mobile phone infrastructure firm has set an indicative price range of HK$1.26 to HK$1.58 ($0.16-$0.20) per share for the initial public offering (IPO), valuing itself at between $28 billion and $35 billion, the people told Reuters.

China Tower´s deal is seen as a key test of the Hong Kong IPO market as investors consider several big deals at a delicate time for the city´s stock market, with the benchmark Hang Seng Index down about 6 percent so far this year.

It also comes as China´s economy has begun to lose growth momentum this year amid a government push to reduce debt and an escalating Sino-U.S. trade conflict.

Earlier this month smartphone maker Xiaomi priced its IPO at the bottom of its range in a $5.4 billion deal while online on-demand services operator Meituan Dianping is expected to raise more than $4 billion when it floats in the coming months.

Chinese investment firm Hillhouse Capital Group made the biggest commitment of $400 million, followed by U.S. fund firm Och-Ziff Capital Management, which is pledging $300 million, the sources said.

Other cornerstones include a unit of Alibaba Group, China National Petroleum Corporation´s CNPC Capital, and two U.S. funds, Darsana Master Fund and Invus Public Equities.

Cornerstone investors usually buy significant chunks of an IPO with a certain lock-up period. The practice is common in several Asian markets, including Hong Kong, and helps bolster demand for large deals.

China Tower, which operated 1.9 million tower sites and had 2.8 million tenants as of the end of June, plans to sell about 43.1 billion shares, or 25 percent of its enlarged share capital, according to the people.