The deal, in which Unicom's Shanghai-listed unit will tap more than a dozen major investors, including Alibaba Group (>> Alibaba Group Holding), Tencent Holdings (>> Tencent Holdings Ltd) and Baidu (>> Baidu), for funds, had sown much confusion after it was first announced last Wednesday.
China Unicom had taken down a statement from the Shanghai stock exchange last week, citing technical issues, and shares in both units remained suspended last week.
But late on Sunday, the telecoms group reiterated it was planning to raise 77.9 billion yuan ($11.7 billion) through an ownership reform plan that has been billed as a model case for revitalizing Chinese state firms with private capital.
"After going through the relevant legal procedures with the National Development and Reform Commission (NDRC) and other departments, the China Securities and Reform Commission (CSRC) will treat the private placement in China Unicom's ownership reform as an exceptional case," the CSRC said in a statement late on Sunday.
Chinese media had speculated the deal violated rules on private placements in terms of deal size and pricing mechanism after the CSRC revised its rules in February.
Some analysts said bumps in the process were only to be expected as it was a complicated process, and the CSRC is unlikely to grant more exceptions to its rules concerning private placement.
"The confusion was likely to have resulted from a lack of coordination among different government authorities, in this case, the NDRC and CSRC, in addressing China Unicom’s private placement plan as part of its hybrid ownership initiative," said Wang Ying, senior director at ratings agency Fitch.
"We think future cases are more likely to involve greater communication and coordination between the NDRC and CSRC, such that the plans will be in compliance with existing regulations."
Shares of Shanghai-listed China United Network Communications Ltd (>> China United Network Communications Ltd) surged 10 percent, the maximum daily limit, on Monday while those of the group's Hong Kong unit, China Unicom Hong Kong Ltd (>> China Unicom (Hong Kong) Limited), also climbed as much as 10 percent to their highest level in more than two years, before ending 3.5 percent higher.
The Shanghai unit's shares had been suspended since April, while the Hong Kong unit's shares were halted from Wednesday.
China Unicom Hong Kong said in a statement on Monday that all the terms of the ownership-reform plan were consistent with those announced previously.
A source familiar with the deal said not everyone was on the same page when the announcement came out on Wednesday but all parties were now fully committed. The source, who was not authorized to speak to the media, declined to be identified.
($1 = 6.6700 Chinese yuan)
(Additional reporting by Kane Wu and Umesh Desai; Editing by Edwina Gibbs and Muralikumar Anantharaman)
By Donny Kwok and Sijia Jiang