According to people familiar with the matter, Gaochun Capital and a subsidiary of Alibaba have become the cornerstone investors of Hong Kong's initial public offering (IPO) in China's state-owned wireless infrastructure operator China Tower.
People familiar with the matter who did not disclose their names, said that 10 cornerstone investors such as Gaochun Capital and Taobao China Holdings Co., Ltd. have agreed to subscribe for a total of US$1.4 billion in China Tower. The China Tower plans to accept investor subscriptions from the week. One person familiar with the matter said that the planned IPO funding could be as large as $8 billion.
As a result, China Tower's offering is expected to become the world's largest IPO in the past four years. The Hong Kong stock market is currently in a downtrend, and the benchmark Hang Seng Index has fallen 15% from its all-time high in January. The IPO fundraising of Xiaomi Hong Kong, which received much attention last month, was $5.4 billion. The company eventually set the issue price at the low end of the reference range, bringing its valuation to only about half of its original target.
According to people familiar with the matter, Gaochun Capital and Taobao China agreed to invest 400 million US dollars and 100 million US dollars respectively. Other cornerstone investors include SAIC, Industrial and Commercial Bank of China, and affiliates of China National Petroleum Corporation.
The Chinese Tower representative failed to comment immediately because he was not at work. An external representative of Gaochun Capital declined to comment, while a representative of Alibaba said that he could not immediately comment.
China National Petroleum Corporation and SAIC Group did not immediately respond to requests for comment from non-working hours.