One government-run Chinese firm is raking in billions of dollars in private capital as part of Beijing's wider plans to overhaul its massive portfolio of state-owned enterprises.
Beijing-based telecom China Unicom will raise $11.7 billion from 14 sources that include a mix of state and private firms, including China Life, CRRC, Alibaba, Baidu, Tencent, Suning and Didi. The new partners will subscribe for about 9 billion new shares and purchase 1.9 billion existing shares. Upon completion, the investors will own 35.2 percent of China Unicom's Shanghai-listed unit, nearly equal to the 36.6 percent stake to be held by the parent group.
Some analysts were bullish on what that investment means for the company.
"We expect the 14 partners will be able to help China Unicom to develop its business and aid in its transformation from a traditional telecom operator into an 'integrated information service provider,'" Michael Meng, an analyst at Bank of China International, wrote in a research note.
Shaping up China's inefficient state sector has long been on Beijing's to-do list. It's no secret those firms have long contributed relatively little to economic growth. Still, reforms are "easier said than done," said Jeremy Stevens, China economist for Standard Bank. That's because Beijing must balance between a number of priorities, such as "keeping people employed, maintaining macroeconomic stability and social harmony."