Officials of China United Network Communications, Ltd. (CUNC), the Shanghai-listed unit of state-owned China Unicom (CU), confirmed Sunday that they will proceed with the sale of 35.19% of CUNC’s A-shares to ten private and state investors as part of a transaction that is slated to raise more than 77.9 billion yuan (US$11.7 billion) in proceeds for CU.

CU, China’s second-largest provider of wireless network services, was selected by the Beijing government last year as one of six state-owned enterprise (SOE) participants in a pilot program which relates to Beijing’s “mixed ownership reform” initiative. Announced in 2013, the goal of the initiative is to funnel private capital into SOEs, thus enabling such companies to deliver returns that correspond more closely to those of better performing private counterparts. Boosted by news of the planned investment, CU’s share price on the Hong Kong exchange has jumped by 32% since the start of this year. Proceeds from the private placement are expected to offset CU net debt, which has risen more than 20% over the past five years as a result of fifth-generation network upgrades.

As a result of the planned placement, CU’s total shareholding in CUNC will be cut by almost half, from 62% to 36.37%. Each of the ten strategic investors will purchase their stakes at a rate of 6.83 yuan (U.S. $1.03) per share. Included among the investors are companies affiliated with technology groups Tencent and Baidu, each of which will acquire CUNC stakes of 5.33% and 3.39%, respectively, and an investment firm linked to the founder of e-commerce giant Alibaba, which will obtain a 2% stake. Other investors include e-commerce concern, state railway company CRRC Corp., and state-owned China Life Insurance, which will emerge with the single largest stake of 10.22%. Approximately nine billion CUNC shares will be allocated to these and other strategic investors. An additional 84.8 million shares will be targeted to select CUNC employees, with another 1.9 billion shares to be assigned to the China Structural Reform Fund Corporation.

Tencent president Martin Lau lauded the ownership reform program as “a very momentous step in the development of the country.” A CU spokesman also welcomed the investment as one that will “further optimize [CUNC’s] corporate governance structure in accordance with market-oriented principles.”