Schedule 13D/A
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 1)*
China Unicom (Hong Kong) Limited
(Name of Issuer)
Ordinary shares of par value HK$0.10 per share
(Title of Class of Securities)
(CUSIP Number)
Lucila Rodríguez Jorge
Telefónica, S.A.
28050 Madrid, Spain
Telephone: (+34) 91 4823734
(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications)
(Date of Event Which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of §§240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box. o
Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See Rule 13d-7 for other parties to whom copies are to be sent.
* The remainder of this cover page shall be filled out for a reporting person’s initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934 (“Act”) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).
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NAMES OF REPORTING PERSONS
TELEFÓNICA, S.A. |
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CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS)
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(a) þ |
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(b) o |
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SEC USE ONLY |
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SOURCE OF FUNDS (SEE INSTRUCTIONS) |
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[WC] |
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CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) |
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CITIZENSHIP OR PLACE OF ORGANIZATION |
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THE KINGDOM OF SPAIN
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SOLE VOTING POWER |
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| NUMBER OF |
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[None] |
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| SHARES |
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SHARED VOTING POWER |
| BENEFICIALLY |
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| OWNED BY |
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1,972,315,708* |
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SOLE DISPOSITIVE POWER |
| REPORTING |
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[None] |
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SHARED DISPOSITIVE POWER |
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1,972,315,708* |
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AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON |
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1,972,315,708* |
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CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS) |
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PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) |
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8,.30%** |
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TYPE OF REPORTING PERSON (SEE INSTRUCTIONS) |
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CO |
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NAMES OF REPORTING PERSONS
TELEFÓNICA INTERNACIONAL, S.A.U. |
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CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS)
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(a) þ |
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(b) o |
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SEC USE ONLY |
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SOURCE OF FUNDS (SEE INSTRUCTIONS) |
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[WC] |
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CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) |
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CITIZENSHIP OR PLACE OF ORGANIZATION |
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THE KINGDOM OF SPAIN
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SOLE VOTING POWER |
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| NUMBER OF |
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[None] |
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| SHARES |
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SHARED VOTING POWER |
| BENEFICIALLY |
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| OWNED BY |
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1,972,315,708* |
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SOLE DISPOSITIVE POWER |
| REPORTING |
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[None] |
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| WITH |
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SHARED DISPOSITIVE POWER |
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1,972,315,708* |
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AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON |
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1,972,315,708* |
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CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS) |
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PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) |
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8.30%** |
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TYPE OF REPORTING PERSON (SEE INSTRUCTIONS) |
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* Includes (a) 1,278,403,444 ordinary shares of China Unicom (Hong Kong) Limited (“China Unicom”) beneficially owned by Telefónica International, S.A.U. as of the date of this Amendment No. 1 to the Schedule 13D and (b) 693,912,264 ordinary shares of China Unicom to be issued pursuant to the Subscription Agreement described herein between Telefónica S.A. and China Unicom.
** Following China Unicom’s capital increase in connection with this transaction, Telefónica’s interest will amount to 8.06% of China Unicom voting share capital.
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SCHEDULE 13D
This Amendment No. 1 (this “Amendment”) amends and supplements the statement on Schedule
13D (the “Schedule 13D”) filed on October 24, 2008 jointly by Telefónica, S.A., a
corporation organized under the laws of the Kingdom of Spain (“Telefónica”), and Telefónica
Internacional, S.A.U., a wholly-owned subsidiary of Telefónica (“Telefónica
Internacional”), with respect to the ordinary shares, HK$0.10 par value per share, of China
Unicom (Hong Kong) Limited, a telecommunications company organized under the laws of Hong Kong
(“China Unicom”). Capitalized terms used in this Amendment without definition have the
meanings ascribed to them in the Schedule 13D.
Introduction
On September 6, 2009, Telefónica and China Unicom entered into a subscription agreement (the
“Subscription Agreement”) pursuant to which each party conditionally agreed to invest the
equivalent of US$1 billion in the other party through the acquisition of shares in the other party.
Under the terms of the Subscription Agreement, the transaction will be implemented, at Telefónica’s
election, either through (a) the subscription by Telefónica of 693,912,264 new ordinary shares of
China Unicom at a price of HK$11.17 each, and the subscription by China Unicom of 40,730,735 new
Telefónica ordinary shares at a price of EUR17.24 each, in each case for cash consideration and
subject to adjustment; or (b) the subscription by Telefónica of 693,912,264 new China Unicom
ordinary shares at a price of HK$11.17 each to be satisfied by the contribution by Telefónica of
40,730,735 Telefónica treasury shares at a price of EUR17.24 each to China Unicom, subject to
adjustment.
Accordingly, Telefónica will be acquiring at completion an additional 693,912,264 ordinary shares,
of HK$0.10 par value per share (the “New China Unicom Shares”), of China Unicom, to be
issued by China Unicom and subscribed by Telefónica either in cash or by the contribution in kind
of 40,730,735 Telefónica treasury shares (such acquisition, the “New China Unicom Shares
Acquisition”).
Items 1, 3, 4, 5, 6 and 7 of the Schedule 13D are hereby amended and supplemented to add the
following:
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| Item 1. |
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Security and Issuer. |
All references to New China Unicom in the Schedule 13D are to China Unicom as defined above.
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| Item 3. |
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Source and Amount of Funds or Other Consideration. |
Pursuant to the Subscription Agreement, Telefónica will be acquiring 693,912,264 ordinary shares to
be issued by China Unicom and subscribed by Telefónica either in cash, for a total of HK$7.751
billion, being an amount equivalent to US$1 billion, or by the contribution in kind of 40,730,735
Telefónica treasury shares. In either case, this acquisition will be funded through internally
generated funds. (See Item 6 and Exhibit 1 to this Amendment).
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| Item 4. |
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Purpose of Transaction. |
On September 6, 2009, Telefónica and China Unicom entered into a strategic alliance agreement in
order to establish a co-operation and synergy program which is aimed at strengthening the business
of each other by-cooperation based on the network, business model and experience of each other,
including in the areas of joint procurement of infrastructure and client equipment, common
development of mobile service
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platforms, joint provision of services to multinational customers, roaming, research and
development, co-operation and sharing of best practices and technical, operational and management
know-how, joint development of strategic initiatives in the area of network evolution and joint
participation in international alliances, and exchange of senior management. In order to strengthen
such strategic alliance, the parties have agreed to acquire shares in each other.
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| Item 5. |
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Interest in Securities of the Issuer. |
Telefónica Internacional currently is the beneficial owner of 1,278,403,444 ordinary shares of
China Unicom, or approximately 5.38% of its ordinary share capital, which includes (a)
1,270,827,304 ordinary shares, and (b) 7,576,140 ordinary shares underlying 757,614 ADSs.
Telefónica, as the parent of Telefónica Internacional, has shared power to vote or to direct the
vote, and the shared power to dispose or to direct the disposition of, such ordinary shares of
China Unicom. Pursuant to the Subscription Agreement described below in Item 6, Telefónica has
agreed to acquire 693,912,264 ordinary shares of China Unicom, subject to the terms and conditions
described therein.
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| Item 6. |
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Contracts, Arrangements, Understandings or Relationships With Respect to Securities of the
Issuer. |
SUBSCRIPTION AGREEMENT.
The following summary of certain material provisions of the Subscription Agreement with respect to
the New China Unicom Shares Acquisition does not purport to be a full and complete description of
such documents and is entirely qualified by reference to the full text of such documents attached
as Exhibit 1 to this Amendment.
The Transaction
On September 6, 2009, Telefónica and China Unicom entered into the Subscription Agreement, pursuant
to which each party conditionally agreed to invest the equivalent of US$1 billion in the other
party through the acquisition of shares in the other party. The transaction will be implemented, at
Telefónica’s election either through:
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(1) |
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the subscription by Telefónica of 693,912,264 new shares of China Unicom at a price
of HK$11.17 each and the subscription by China Unicom of 40,730,735 new Telefónica
ordinary shares at a price of EUR17.24 each , in each case for cash consideration; or |
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the subscription by Telefónica of 693,912,264 new shares of China Unicom at a price
of HK$11.17 each to be satisfied by the contribution by Telefónica of 40,730,735
Telefónica treasury shares at a price of EUR17.24 each. |
in each case, subject to adjustments as described below in respect of China Unicom Shares.
The New China Unicom Shares
The number of New China Unicom Shares was arrived at by dividing HK$7,751,000,000 (being an amount
equivalent to US$1 billion converted at the agreed exchange rate) by the arithmetic average of the
official closing prices on the Hong Kong Stock Exchange per Share for the 30 consecutive days in
which the Shares were traded on the Hong Kong Stock Exchange ending on 28 August 2009 (the
“China Unicom Price per Share”).
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Acting pursuant to the general mandate granted by the China Unicom’s shareholders at the annual
general meeting of China Unicom held on May 26, 2009, the board of directors of China Unicom has
approved the allotment and issuance of the New China Unicom Shares to be subscribed for by
Telefónica (directly or through any of its subsidiaries).
The New Unicom Shares when allotted and issued will be credited as fully paid, will be free of all
encumbrances and will rank pari passu in all respects with the other existing ordinary shares of
HK$0.10 par value per share of China Unicom listed on the Hong Kong Stock Exchange.
Telefónica has agreed with China Unicom that for a period of one year from completion of the
acquisition of the New China Unicom Shares (“Completion”), Telefónica shall not, directly or
indirectly, sell, transfer or dispose of any of the shares held, directly or indirectly, by
Telefónica or any of its subsidiaries (save for the transfer of such shares to any member of the
Telefónica group). China Unicom has made an analogous undertaking with respect to its
participation in Telefónica’s share capital.
An application will be made by China Unicom to the Hong Kong Stock Exchange for the listing of, and
permission to deal in, the New China Unicom Shares on the Hong Kong Stock Exchange.
Adjustments
In the event that any dividends and/or other distributions are made or paid by China Unicom to its
shareholders after the date of the Subscription Agreement but before Completion, the China Unicom
Price Per Share shall be reduced by the amount of such dividends and/or other distributions
corresponding to the China Unicom ordinary shares on a per share basis.
If, from the date of the Subscription Agreement until Completion, there occurs any change in the
issued share capital of China Unicom, by reason of share splits, share consolidation, exchange of
all the shares of China Unicom, or similar events, the number of the New China Unicom Shares shall
be adjusted appropriately so that Telefónica shall receive such equivalent number of New China
Unicom Shares after taking into consideration the effects of such event on the number of shares
comprised in the share capital or the capital stock of China Unicom.
Condition to Completion
Completion of the subscription for the New China Unicom Shares by Telefónica is conditional on the
following conditions being fulfilled (or, if applicable, waived) on or before November 7, 2009 (or
such other date as the Company and Telefónica may agree in writing) (the “Long Stop Date”):
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the listing of, and permission to deal in, all the New China Unicom Shares having been
granted by the Listing Committee of the Hong Kong Stock Exchange and such listing and
permission not subsequently being revoked prior to completion; |
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the warranties given by China Unicom in the Subscription Agreement being true and accurate as
at the date of the Subscription Agreement and remaining so as at the date of Completion as if
made on that date; |
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there not having been any material adverse change (as this term has been defined in the
Subscription Agreement) in respect of China Unicom or its group of companies, and China Unicom
having operated its business and the group’s business in the ordinary course of business,
since the last published consolidated accounts of the company; and |
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all of the conditions to China Unicom’s acquisition of shares in Telefónica under the
Subscription Agreement having been satisfied, or waived (other than the condition set out in
paragraph 3.1.1 of the Subscription Agreement) by China Unicom, as the case may be. |
Telefónica’s conditions under the Subscription Agreement set out in paragraphs (ii) and (iii) above
are the only conditions that can be waived by Telefónica, in whole or in part.
Completion
Subject to the conditions established in the Subscription Agreement having been fulfilled or waived
by China Unicom or Telefónica, as the case may be, on or before the Long Stop Date, Completion
shall take place on the fifth business day following the date on which the last condition has been
satisfied or waived by the relevant party, as the case may be.
If the conditions are not fulfilled or waived by the relevant party, as the case may be, on or
before the Long Stop Date, the Subscription Agreement shall automatically terminate, save that
certain provisions, including Telefónica’s entitlement to nominate one representative to the Board
referred to below, shall survive termination.
Telefónica’s Board Representation
Subject to Telefónica or any of its subsidiaries holding in aggregate, directly or indirectly, not
less than 5% of the issued share capital of China Unicom from time to time and to the extent not
prohibited under applicable law, the articles of association of China Unicom and the Listing Rules,
Telefónica shall be entitled to nominate one representative to the Board of Directors of China
Unicom.
Undertakings by China Unicom
China Unicom has agreed to use its best endeavours to maintain a listing of all the issued ordinary
shares of China Unicom on the Hong Kong Stock Exchange. With effect from Completion, and for so
long as the strategic alliance agreement with Telefónica is in effect, China Unicom shall not (i)
offer, issue or sell any significant number of its ordinary shares (including those held in
treasury by the company itself, if any), or any securities convertible into or other rights to
subscribe for or purchase a significant number of China Unicom’s ordinary shares (including those
held in treasury by the company itself, if any), to any current major competitor of Telefónica or
(ii) make any significant investment, directly or indirectly, in any current major competitor of
Telefónica. Telefónica has made similar undertakings.
The strategic alliance agreement between the parties terminates on the third anniversary and
automatically renews thereafter for one year terms, subject to either party’s right to terminate on
six month’s notice. Also, the strategic alliance agreement may be terminated by China Unicom if
Telefónica sells its shares in China Unicom causing it to own less than 5% of the issued share
capital of China Unicom or by Telefónica if China Unicom sells its shares in Telefónica and ceases
to own at least 0.5% of the issued share capital of Telefónica. In addition, the strategic
alliance agreement is subject to termination in the event either party is in default and
automatically terminates on a change in control of China Unicom.
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| Item 7. |
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Material to be Filed as Exhibits. |
Exhibit 1:
Subscription Agreement, dated September 6, 2009 between Telefónica, S.A. and China Unicom (Hong
Kong) Limited
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Exhibit 2:
Joint Filing Agreement, dated September 24th, 2009, between Telefónica, S.A. and
Telefónica Internacional, S.A.U.
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I certify that the
information set forth in this statement is true, complete and correct.
Dated: September 17th, 2009
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TELEFÓNICA, S.A.
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By: |
/s/ María Luz Medrano Aranguren
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Name: |
María Luz Medrano Aranguren |
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Title: |
Group General Vice Counsel |
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TELEFÓNICA INTERNACIONAL, S.A.U.
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By: |
/s/ Cristian Aninat Salas
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Name: |
Cristian Aninat Salas |
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Title: |
General Counsel |
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Exhibit Index
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| Exhibit No. |
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1.
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Subscription Agreement, dated September 6, 2009 between
Telefónica, S.A. and China Unicom (Hong Kong) Limited. |
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2.
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Joint Filing Agreement, dated September 24, 2009, between
Telefónica, S.A. and Telefónica Internacional, S.A.U. |