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Hillhouse, Alibaba said to be cornerstone investors in China Tower's IPO

Hong Kong

CHINA Tower Corp, the state-owned wireless infrastructure operator, has attracted Hillhouse Capital and a unit of Alibaba Group Holding Ltd as investors in its planned Hong Kong initial public offering, people with knowledge of the matter said.

Hillhouse funds and Taobao China Holding Ltd are among the 10 firms that agreed to buy about US$1.4 billion of stock as cornerstone investors, the people said. China Tower is expected to start taking investor orders on Monday, said the people, who asked not to be identified because the details are private. The planned deal could raise about US$8 billion, one of the people said.

China Tower is pursuing what could be the world's biggest IPO in almost four years amid a slump in the Hong Kong equity market, with the benchmark Hang Seng Index trading down 15 per cent from its all-time high in January. This year's other hotly anticipated IPO - Xiaomi Corp's US$5.4 billion fundraising - priced last month at the bottom of the range, valuing the phone maker at about half its original target.

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Hillhouse funds and the Alibaba unit agreed to invest US$400 million and about US$100 million, respectively, in China Tower's IPO, the people said. Other cornerstone investors include affiliates of China National Petroleum Corp, SAIC Motor Corp and Industrial & Commercial Bank of China Ltd, according to the people.

An US$8 billion deal would be the world's biggest first-time share sale since Alibaba's US$25 billion US stock offering in 2014, according to data compiled by Bloomberg. China Tower is expected to price its offering around Aug 1, the people said.

The world's largest telecom tower service was formed by combining tower assets of China Mobile Ltd, China Unicom Hong Kong Ltd and China Telecom Corp in 2015 as part of a broader plan to reform the nation's state-dominated wireless industry.

China International Capital Corp and Goldman Sachs Group Inc are joint sponsors for the planned deal. BLOOMBERG

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