Datang group began reorganization

11/27/2007, Nov. 20, The institute of telecom science and technology of MII (Datang Group) announced they would sell their 13% share of Datang Mobile with a price of 1.001billion RMB. They requested the buyer must be domestic company, and the buyer won't compete with Datang mobile. Before this, another shareholder of Datang mobile, Shanghai Putian group (another state-hold telecom equipment company) has announced to sell their 0.808% share of Datang mobile with 70million RMB.
Who is Datang mobile? They are the holder of Chinese 3G standard, TD-SCDMA standard. But why those two companies want to sell their shares of Datang mobile? Who are the possible buyer?
According to local media, Datang group expects to improve their financial situation through the deal. Although the net financial value of Datang mobile is only 71.26 million RMB, their stock market value is estimated to be nearly 8billion RMB because of the 3G concept. Some local power companies and some insurance companies have showed their interest on the shares of Datang mobile.
How is Datang mobile's financial performance? According to its own financial report, in year 2006, its revenue is 128million RMB, but the net loss is 122 million RMB. At the same time, Datang mobile has 284million short debt and 120million long-tern debt.
After this deal, Datang mobile's main shareholders will include Datang group(79.524%), Shanghai Alcatel-Bell (4.9%), and a big new investor.
Clearly, Datang group hope to get more money throught the deal, but if TD-SCDMA cann't succeed in the real market finally, How much Datang mobile will worth?