China Telecom Completes Purchase Of CDMA Assets From Parent CompanyJanuary 9, 2013 | Print | Comments | Category: Business, Telecom & Wireless
Hong Kong-listed China Telecom Company Ltd. completed the purchase of CDMA network assets from its parent company on December 31, 2013, and the related delivery arrangement has finished.
On August 22, 2012, the Hong Kong-listed China Telecom signed an agreement with its parent company China Telecom Group, which said it planned to acquire the CDMA network assets for CNY84.595 billion. According to the agreement, China Telecom would acquire the CDMA network assets and related debts in China's 30 provinces, cities, and autonomous regions, excluding Tibet, from its parent company. The acquisition delivery would be implemented on December 31, 2012.
By March 31, 2012, the book value of these assets was CNY111.206 billion, including CNY93.046 billion for real estates, factory buildings and equipment; and CNY11.663 billion for projects undergoing construction. Meanwhile, the book value of current liabilities was CNY30.032 billion.
For the acquisition of the assets, the two parties initially agreed on a consideration of CNY84.595 billion and the final price could be adjusted. The adjustment range is limited to CNY3 billion.
China Telecom said in its report that the acquisition of the CDMA network assets will reduce the network leasing costs, which will help the company control the CDMA investment decisions more directly, so as to improve the overall operating efficiency and value of its mobile business.
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