Chinese state looks for bidders for $200m stake in Citic Networks
State-owned Chinese industrial investor Citic is planning to sell a 49% stake in its mainland China-based Citic Networks.
Citic – formerly the China International Trust Investment Corporation – is hoping for at least $200 million for the stake, according to Chinese business news service Caixin Global.
The deal does not involve Citic’s separate business Citic Telecom CPC, a global operation that is based in Hong Kong. Beijing-based Citic Networks provides internet access services and sells and leases satellite transponders and other telecommunication equipment.
It operates fibre networks and has a licence to allow it to provide basic telecoms services, giving it some ability to compete with state-controlled China Mobile, China Telecom and China Unicom.
Citic has already received two bids for the 49% stake, according to Caixin Global – from Shanghai-based Dr Peng Telecom & Media and Beijing Zhongtong Yingtian Technology.
Dr Peng group says it is the fourth largest telecoms group in China and the largest privately owned telecoms company. It was founded in 1985 and listed on the Shanghai stock exchange in 1994. It says it is the only non-state-owned company that offers broadband internet access and application services as its core business.
Dr Peng tried unsuccessfully to acquire a 10% stake in 2013, says Caixin Global. Beijing Zhongtong Yingtian Technology is a newer and smaller provider of value-added network services, adds the publication.
The downside of the investment is that Citic Networks is loss-making: it posted a net loss of $7.4 million in the first half of the year, and has debts of $46 million and assets of $43 million. Caixin Global says that Citic will require a successful bidder to provide working capital to Citic Networks within three years.