SK Telecom Buys $1 Billion Convertible Bonds In China Unicom

HONG KONG -(Dow Jones)- South Korea's SK Telecom has agreed to buy $1 billion worth of convertible bonds in China Unicom, the listed arm of China's second largest mobile service provider by subscribers, China Unicom said in a statement Wednesday.

The initial conversion price of the bond is HK$8.63 per share.

The bonds are convertible to 899.75 million shares, which represent about 7.15% of the issued and outstanding shares of China Unicom as of June 20 and about 6.67% of the enlarged issued and outstanding share capital of China Unicom, according to the statement.

China Unicom expects the net proceeds of the bond issue to reach $997 million, which will be used for general corporate and working-capital purpose.

The bonds have a maturity date of 5 July 2009, according to the statement.

China Unicom's share closed at HK$6.70 per share on Tuesday, down 2.2% from HK$6.85 on previous day.

China Unicom also said in the statement that it and SK Telecom, South Korea's largest wireless carrier by revenue, have agreed to cooperate on CDMA, business, including handsets, network, and value-added services for mobile phones.

China Unicom said it will make a further announcement on the cooperation, if necessary, upon the finalization of the alliance.

-By Ernest Kong, Dow Jones Newswires; 852-2802-7002; ernest.kong@dowjones.com

(END) Dow Jones Newswires"

Posted to the site on 21st June 2006