Goldman Sachs to sell stake worth $1.54 billion in China's ICBC

10 Nov 2011

Goldman Sachs, the global investment banking and securities firm is selling part of its stake worth around $1.54 billion in China's Industrial and Commercial Bank of China (ICBC). 

The Wall Street firm booked a $1.05 billion paper loss on its ICBC stake while reporting its third quarter results last month, its second quarterly loss since it went public in 1999.

Most of its $393 million loss was in investing and lending, where Goldman recorded negative net revenues of $2.48 billion. The firm admitted that this loss was due to the weakness in its private equity portfolio with the ICBC.

Goldman is selling 2.4 billion shares, or 2.8 per cent of its stake in ICBC's Hong Kong listed stock, Reuters yesterday reported, citing Sources familiar with matter.

Goldman is offering the shares in a range of HK$4.88-5.00 each, a discount of between 3.7 and 6 per cent to the last traded price, a term sheet seen by IFR, a Thomson Reuters publication.

After the Chinese government started buying shares in state-owned lenders on concerns that bad loans may increase, ICBC shares soared last month by 48 per cent to HK$5.19 from a two-and-a-half year low of HK$3.50.