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Placing hopes on 3G with proceeds
By Rich Zhu |
May 19, 2009, Tuesday
|
Print Edition
Print Edition
DATANG Telecom Technology Co aims to raise 1.2 billion yuan (US$153.8 million) through a private placement, which will be used to develop 3G-related products and pay back a bank loan, the Shanghai-listed firm said yesterday.
Approval from the stock regulator is needed for state-owned Datang Telecom's plan to issue 140 million shares.
The China Academy of Telecommunications Technology, Datang Telecom's parent firm, is one of the investors in the placement, the telecom equipment maker said in a statement to the Shanghai Stock Exchange.
"China now has 3G, and it's a historic chance for us to develop and upgrade our product portfolio," the Beijing-based firm said in the statement.
Datang Telecom will use the proceeds to research 3G data cards, 3G reading terminals and intelligent bank cards that meet the EMV standard, a next-generation bank card format by Europay, MasterCard and Visa.
Meanwhile, Datang Telecom will also use some of the proceeds to pay back bank loans. By the end of last year, the firm's debt totaled 2.2 billion yuan. It made a net profit of 45.6 million yuan last year.
Shares of Datang Telecom jumped 5.01 percent to close at 5.28 yuan yesterday while the Shanghai Composite Index gained 0.28 percent.
In January, China issued 3G, or third generation, licenses to three telecom firms. Within three years until 2011, direct investment by telcos and equipment makers in 3G is expected to total 280 billion yuan, said the Ministry of Industry and Information Technology.
Approval from the stock regulator is needed for state-owned Datang Telecom's plan to issue 140 million shares.
The China Academy of Telecommunications Technology, Datang Telecom's parent firm, is one of the investors in the placement, the telecom equipment maker said in a statement to the Shanghai Stock Exchange.
"China now has 3G, and it's a historic chance for us to develop and upgrade our product portfolio," the Beijing-based firm said in the statement.
Datang Telecom will use the proceeds to research 3G data cards, 3G reading terminals and intelligent bank cards that meet the EMV standard, a next-generation bank card format by Europay, MasterCard and Visa.
Meanwhile, Datang Telecom will also use some of the proceeds to pay back bank loans. By the end of last year, the firm's debt totaled 2.2 billion yuan. It made a net profit of 45.6 million yuan last year.
Shares of Datang Telecom jumped 5.01 percent to close at 5.28 yuan yesterday while the Shanghai Composite Index gained 0.28 percent.
In January, China issued 3G, or third generation, licenses to three telecom firms. Within three years until 2011, direct investment by telcos and equipment makers in 3G is expected to total 280 billion yuan, said the Ministry of Industry and Information Technology.
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