(Yicai Global) April 16 -- China Mobile plans to invest in a private placement in AsiaInfo Technologies to become its second-largest shareholder for HKD1.4 billion (USD178 million).

Software maker AsiaInfo will issue 182 million new shares for which the state-owned telecoms carrier will pay HKD7.60 (98 US cents) apiece, the target said in a statement on April 14. The shares will make up 20 percent of post-placement equity and China Mobile will need to hold onto them for one year; it can also nominate two non-executive directors to sit on the Beijing-based company’s board.

The move will deepen ties between the two companies as they work together in fifth-generation mobile networks, digital operations and cloud services for vertical industries, the statement added, saying they will provide customers across a range of sectors with richer communication and digital services and data infrastructure.

AsiaInfo, which supplies to over 200 telecoms clients, will use 40 percent of the money raised to invest in new product and business development, it said. It will use about 35 percent on acquiring assets and 25 percent as general working capital and also hopes to extend ties with other carriers to offer better quality products and services.

Editor: James Boynton