China Telecom to buy CDMA services from China Unicom
Updated: 2008-06-02 23:15
HONG KONG - China's fixed-line operator China Telecom announced Monday that it will buy the CDMA services of China Unicom at 43.8 billion yuan (US$ 6.31 billion) to become an integrated service provider.
China Telecommunications Corporation, the mother firm of China Telecom, will also buy infrastructural CDMA network from China Unicom Group, the state-owned mother firm of the Hong Kong-listed China Unicom, the company said in a statement.
Speaking at a press conference in Hong Kong, Wang Xiaochu, chairman and chief executive officer of China Telecom, said the deal is expected to be completed in October, subject to shareholder approval at company annual conference in September.
China Telecom will pay for the transaction in cash, Wang said.
Trading of the company's shares, which has been suspended since May 23, will resume on Tuesday.
Wang said he expected the company to post earnings as early as 2012, although he acknowledged the deal could impact the earnings of the company in short term.
Wu Andi, the company's chief financial officer, said the company will consider the issuing of bonds as the best choice for financing, adding that the debt-equity-ratio of the company will still be within the reasonable range.
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