China Telecom approved for a secondary listing in Shanghai

China Telecom approved for a secondary listing in Shanghai

The China Securities Regulatory Commission (CSRC) approved a listing by China Telecom on the main board of the Shanghai Stock Exchange six months after the company was delisted from the New York Stock Exchange (NYSE).

According to Caixin, Hong Kong-listed China Telecom aims to raise about 54.4 billion yuan ($8.4 billion) through a listing on the main board of the Shanghai Stock Exchange.

According to the prospectus, the funds will be used to expand its next-generation 5G networks, and for research and development. It plans to issue up to 12.1 billion Chinese A-shares in Shanghai, or up to 13% of its total equities after the listing.

China Telecom went public in Hong Kong in 2002, the same year of its New York listing. The company’s Hong Kong-listed shares have surged more than 49% since the beginning of this year.

China Telecom started looking to list in Shanghai after it was added to a blacklist of companies that the U.S. government accuses of having links to the Chinese military. U.S. investors are banned from trading shares of any company on the blacklist, resulting in the New York Stock Exchange suspending it from trading. China Unicom and China Mobile, the country’s other two major wireless carriers have also been hit with sanctions.

According to analysts and lawyers, the approval to sell China Telecom’s shares also emphasized Beijing’s determination to use the capital markets to offset the damage caused by US regulators.

The company was booted from NYSE along with state-run peers China Mobile and China Unicom in January to comply with an executive order signed by Donald Trump that prohibited Americans from investing in businesses with alleged ties to China’s military.