China Mobile Ltd. 941 2.66% said it plans to sell billions of dollars worth of shares in Shanghai, days after learning it would definitely be ejected from U.S. markets under a Trump-era investment blacklist.
The company, the world’s largest mobile operator by subscribers, said late Monday it planned to list on the Shanghai Stock Exchange. As part of that plan, China Mobile will issue up to 964.8 million shares. That implies a deal size of nearly $6.1 billion based on its shares’ closing price in Hong Kong on Monday.
On May 6, China Mobile and its two smaller rivals, China Telecom Corp. and China Unicom (Hong Kong) Ltd. , lost appeals against being kicked off the New York Stock Exchange. The Big Board is moving to delist them to comply with an investment ban introduced by former President Donald Trump.
China Mobile didn’t say the Shanghai offering was linked to the U.S. delisting. Chinese authorities and investors have more broadly wanted to make it easier for domestic investors to invest in more of China’s corporate champions and its fast-growing technology companies.
The telecoms group said it plans to spend the deal’s proceeds on projects such as faster mobile networks, new cloud infrastructure, and superfast broadband.
China Mobile’s stock jumped as much as 4.8% intraday on Tuesday. In January, China Mobile shares fell to their lowest level since 2006, but they have since regained some ground. The Hong Kong listing has already enabled some mainland investors to buy the shares via a trading link known as Stock Connect.
The planned listing fits into a broader trend of Chinese companies selling stock either in Hong Kong or on the mainland, said Rob Mumford, an investment manager for emerging-market equities at GAM Investments.
“A domestic listing would allow Chinese companies to raise capital at a higher valuation at home and, more importantly, it gives access to the local investors to internationally listed firms,” Mr. Mumford said.
He added that investors had been receptive to Chinese companies seeking domestic listings despite the dilution this could create—meaning that existing holders’ economic stakes in the company will be reduced.
China Mobile said its Shanghai Stock Exchange listing is subject to market conditions and approval from shareholders and regulators. China International Capital Corp. and Citic Securities Co. are the deal’s joint sponsors.
Its counterpart China Telecom is also pursuing a Shanghai listing. China Telecom said last month that the securities regulator had accepted its application for such a listing, without giving details about the size or time frame.
For the Chinese telecoms, “having a listing back home would enhance their trading liquidity and possibly valuations too,” said Mark Dong, co-founder of hedge fund Minority Asset Management.
China United Network Communications Ltd. , the parent company of China Unicom, is already listed on the Shanghai exchange.
Write to Joanne Chiu at [email protected]
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