China Unicom, one of the leading telecommunications giants in China, announced on July 23 that it would terminate its American Depositary Receipt (ADR) on October 18 this year, meaning the company will be officially delisted from the NYSE.
According to the announcement, the delisting took effect on May 18, 2021 after the board of directors decided to terminate the ADR, later issuing a notice to the Bank of New York Mellon, the company’s ADR agency.
As of July 20, 2021, China Unicom has issued about 4.2 million ADRs, accounting for about 0.1% of its all shares. The firm’s ADRs can be returned to the Bank of New York Mellon before October 18 in exchange for common shares in the company, at a rate of 1:10, which can then be traded on the Hong Kong Stock Exchange.
US-listed ADRs account for only about 0.2% of China Unicom’s total share capital, causing industry insiders to think that delisting will have little impact on the firm.
The delistings of three of China’s biggest telecommunications companies originated at the end of 2020 as the American bourse sought to comply with an executive order barring trade with companies holding ties to China’s military.
Subsequently, the NYSE repeatedly changed its decision. On January 5, stock exchange officials announced that they would no longer promote the delisting process of the three major Chinese operators in the US. However, on January 6, it announced that it would continue to push forward the delisting “because of an executive order by the Trump administration”. As China Mobile asserted in a stock exchange filing on January 20, “since its listing in October 1997, the company has complied strictly with laws and regulations, as well as regulatory requirements of its listing venues.” On May 6, the delisting decision was finally settled.
On July 22, China Telecom’s A-share IPO has been approved by China’s Securities Regulatory Commission. According to the prospectus, the number of A shares that the company plans to issue publicly will not exceed 12.093 billion shares, adding that it plans to raise 54.4 billion yuan ($8 billion) in the process. On May 17, China Mobile said it would apply for a listing on the main board of the Shanghai Stock Exchange.
In 2020, the operating income of China Mobile was 768.1 billion yuan ($119 billion), far exceeding China Telecom’s 389.94 billion yuan ($60 billion) and China Unicom’s 303.84 billion yuan ($47 billion).