Equity raising reduced from RMB6bn to RMB4.8bn
   
Dr. Peng announced that its proposed equity raising (first announced on 22January) will be reduced from RMB6bn to RMB4.8bn. See our report on theprior announcement here. The impetus for the change seemed to be the resultof a recent regulatory announcement by the China Securities RegulatoryCommission (“CSRC”) which revised rules surrounding private placementswith related parties. The lower amount raised means the company also neededto revise down its capex plans accordingly from RMB8.4bn to RMB6.5bn,which hopefully would result in a more disciplined approach to its future capexplans but may also slow down its network expansion.
   
Less participation from the major shareholders
   
The two controlling shareholders, who were looking to take up the entireRMB6bn stake to be raised previously, will now be eligible for a maximum ofRMB1.2bn in shares each. The remaining amount (RMB2.4-3.4bn) is to besatisfied by issuing shares to a maximum of 10other institutional investorswhom will be approved by the CSRC. The other institutional investors will besubject to a lock-up of 12months for the additional subscriptions while themajor controlling shareholder will be subject to a 36-month lock-up.