China Telecom Launches Cut-Down IPO
Just hours before it would have been obliged to issue a new prospectus for its
IPO, China Telecom has relaunched the offer, cutting it down by 55% but leaving
the terms of the offer unchanged. China Telecom will now issue 7.55 billion H shares, 5% to retail Hong Kong
investors, and the rest internationally, instead of the original 16.8 billion
shares. However the offer price is unchanged at HK$1.47 to HK$1.69 with a promised
dividend of 6.5 HK cents. China Telecom pulled its US$3.6bn offering last week after the international
segment was undersubscribed by 30%, with the Hong Kong retail segment just scraping
through at 1.05 times over-subscribed - a sad contrast to the recent successful
Bank of China (Honk Kong) offering. Marketing of the international tranche opened yesterday and book building is
expected to close by 5pm, New York time, today. The Hong Kong offering starts
today and will close at noon next Monday. Market reactions in Hong Kong were
mixed, but most commentators though the issue stood a reasonable chance of success
in this new form. .
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