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November 24, 2006

China Communications Services Plans 2.5 billion IPO

posted by MR WAVETHEORY at 11/24/2006 10:42:00 AM
Investing in China is the theme these days. China Telecom subsidiary China Communications Services plans to offer 1.29 billion shares at HKD 1.56-1.96 each in an initial public offering (IPO) in Hong Kong, according to the company's preliminary prospectus, cited by newsagency XFN. The integrated provider to telecommunication support services is expected to raise up to HKD 2.53 billlion. Its clients include five mainland telecommunications operators, namely China Telecom, China Mobile, China Unicom, China Netcom and China Railcom.

The company plans to use 50 percentof the IPO's net proceeds for capital expenditure over the next two year, including 20 percent for the purchase of testing and construction equipment for design, construction, project supervision and management businesses, 15 percent for the purchase of simulation and testing systems, 10 percent for 3G technology development and the other 5 percentct on upgrading its existing premises. Some 40 percent of the net proceeds will be used for selective acquisitions from China Telecom Group and other strategic investments, while the remaining 10 percent will be used for general working capital.

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