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Bank of America sells $7.3 bn CCB stake

Bank of America sells $7.3 bn CCB stake
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First Published: Tue, May 12 2009. 04 53 PM IST
Updated: Tue, May 12 2009. 04 53 PM IST
Hong Kong: Bank of America sold about $7.3 billion worth of shares in China Construction Bank to a group of investors, a source said on Tuesday, as the struggling US bank seeks to raise cash.
A unit of China Life Insurance Co Ltd, Singapore state investment agency Temasek Holdings, and China’s Hopu Investment Management Co, were part of the consortium, the source said. The source was directly involved in the deal but not authorised to speak on the record about it.
The source said the sale involved 13.5 billion Construction Bank shares sold at HK$4.20 each, a 14.3% discount to their closing price on Monday. CCB’s Hong Kong-listed shares ended up 1.6% at HK$4.96 in a broader market up 0.4%.
The shares fell nearly 7% on Monday in a weaker market on concerns Bank of America might sell a stake.
A Bank of America spokesman declined to comment and an official with Beijing-controlled China Construction Bank could not be immediately reached for comment.
The 6% chunk of BofA shares sold was the maximum stake it was allowed to sell after a recent lock-up lapsed. The sale cuts Bank of America’s stake in CCB to around 10.6%.
Bank of America had been expected to sell shares in Construction Bank since the US government ordered it to find $33.9 billion worth of capital following its “stress test” of 19 large US banks.
The discount is wider than when Bank of America offloaded $2.83 billion worth of shares in Construction Bank in January at 12% below the Chinese bank’s last trading price. That same month, Royal Bank of Scotland sold a $2.4 billion stake in Bank of China at a 7.6% discount.
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First Published: Tue, May 12 2009. 04 53 PM IST