State-run mobile operator China Unicom has raised a staggering $12 billion in funds in its latest round with influential technology investors like Baidu, Alibaba, Tencent, Didi Chuxing, and JD.com.
China Unicom is China’s second largest operator and has a gigantic customer base in comparison to other mobile companies. With 269 million mobile customers, the company is recognized for having a tremendous client base. The newly incorporated investment is being made as part of China’s 2014 ‘mixed ownership’ strategy.
The strategy promotes state entities to take on private capital to push forth the part privatization of national assets to “stoke economy growth.” The deal will also essentially help reshape its corporate structure and encourage more innovative ideas within the company. Not only was the financial aspect important in their recent round of funding, China Unicom also wanted to push forth with its technological advances by having influential technology companies pledge a stake in the company. It’s reported that a portion of the proceeds will also be distributed towards piloting and eventually releasing 5G services across the entire country of China.
The strange thing about all this is that the company announced it was raising the funds via its Shanghai-listed unit from more than a dozen investors, but it later took down the announcement from the Shanghai stock exchange. According to Reuters, shares of the two listed units remain suspended, and one investor named by Unicom has denied any involvement in the deal. This round of funding lacks clarity and is headed in a puzzling direction.
Hao Hong, head of the research facility at BOCOM International, was quick to comment on the removal of the announcement, stating: “It’s very, very odd…Investors who were trying to get into this stock after the ownership reforms will be disappointed. At this stage, it’s difficult to speculate about the reason for the withdrawal, but I think it’s just a matter of time before they sort it out.”
While China Unicom has reportedly raised these funds, it would be in their best interest to reveal the specifics about the deal, so there is no confusion regarding the whereabouts of the $12 billion.