China Communications Services Corp, the engineering unit of China Telecom, said it will buy 4.63 billion yuan (US$607 million) of telecommunications assets from its parent.

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The company will use 1.2 billion yuan from its initial public offering proceeds and 1.4 billion yuan of its own cash to pay for the acquisition, China Communications said in a statement to the Hong Kong Stock Exchange. The company said it will borrow the rest of the funds needed.

China Communications also said it will assume the debt of the assets amounting to 75.2 million yuan. China Telecommunications Corporation is the controlling shareholder of the company.

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