China Telecom is raising about US$1.4bn (£895m) from its long-awaited share flotation, confirming reports that poor investor would force it to slash the size of the offering.

The state-owned phone company, which operates in Shanghai and three of China's richest provinces, has priced its shares at HK$1.48 (£0.12; US$0.19) each, the bottom of the predicted range.

And demand for the shares, while adequate, was not spectacular, traders said.

The initial public offering, which has been the subject of much rumour-mongering, is less than half its planned size, and was postponed at least once.

Delay

Under the revised deal, China Telecom is selling 7.6 billion shares, or 10% of its share capital.

Trading is expected to begin in a week's time in New York and Hong Kong, about a week later than originally planned.

Institutional investors are being allocated 95% of the offering, with the rest going to the Hong Kong retail market.

According to media reports, Asia's richest businessman, Li Ka-shing, was subscribing to some HK$400m-worth of Chine Telecom shares.