CHINA Tower Corp., the world’s largest telecom tower operator, has lined up US$1.4 billion from 10 cornerstone investors for its Hong Kong initial public offering (IPO) of up to US$8.7 billion, in what would be the world’s biggest listing in four years, sources close to the deal said.

The Beijing-based mobile phone infrastructure firm has set an indicative price range of HK$1.26 to HK$1.58 (US$0.16-US$0.20) per share for the IPO, valuing itself at between US$28 billion and US$35 billion, the sources said.

China Tower’s deal is seen as a key test of the Hong Kong IPO market as investors consider several big deals at a delicate time for the city’s stock market, with the benchmark Hang Seng Index down about 6 percent so far this year.

It also comes as China’s economy has begun to lose growth momentum this year amid a government push to reduce debt and an escalating Sino-U.S. trade conflict.

Earlier this month, smartphone maker Xiaomi priced its IPO at the bottom of its range in a US$5.4 billion deal while online on-demand services operator Meituan Dianping is expected to raise more than US$4 billion when it floats in the coming months.

Chinese investment firm Hillhouse Capital Group made the biggest commitment of US$400 million, followed by U.S. fund firm Och-Ziff Capital Management, which is pledging US$300 million, the sources said.

Other cornerstones include a unit of Alibaba Group, China National Petroleum Corp.’s CNPC Capital, and two U.S. funds — Darsana Master Fund and Invus Public Equities.

Cornerstone investors usually buy significant chunks of an IPO with a certain lockup period. The practice is common in several Asian markets, including Hong Kong, and helps bolster demand for large deals.

(SD-Agencies)