June 30 (Bloomberg) -- Xinhuanet Co., a unit of China’s official Xinhua News Agency, will use proceeds from an initial public offering in Shanghai to expand in cloud computing and the mobile Internet, according to a preliminary prospectus.
The company will sell 51.9 million shares representing 25 percent of the shares outstanding, Beijing-based Xinhuanet said in the filing issued on the website of the China Securities Regulatory Commission.
China’s state-run media are selling shares to help reduce their financial burden on the government while investing to adapt to rising consumption of news on mobile devices like smartphones and tablet computers. People.cn Co., the online arm of the Communist Party-run People’s Daily newspaper, raised 1.4 billion yuan ($226 million) in a 2012 IPO. Sales of minority stakes in online operations still leave ultimate control of the press in the hands of the state.
Proceeds from the planned Xinhuanet sale, which was first announced in January 2013, will be used to fund five projects with a combined investment of 1.5 billion yuan, according to the prospectus.
The largest project, accounting for 644.7 million yuan worth of the proceeds, will establish a cloud platform for multimedia applications and services, the filing said.
The second-largest project, accounting for 531.6 million yuan, is to develop a system for mobile Internet integration, processing and distribution. Other projects include a big data analysis system; a new media technology research and development center and an online education project, according to the filing.
The filing didn’t say when the shares would start trading.
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