BankAm likely to sell part stake in China Construction Bank
24 Aug 2011
China Construction Bank Corp (CCB), the world's second-largest lender by market capitalisation, said US-based Bank of America Corp (BankAm) would continue to hold a 5-per cent stake in CCB, even after being permitted to reduce its stake on 29 August.
The US bank is currently second-largest shareholder in CCB, with a 10.23-per cent stake.
CCB president Zhang Jianguo told reporters in Hong Kong on Monday that he had heard the news through formal channels, without elaborating.
Reuters had earlier reported BankAm was in talks to sell part of its stake, currently valued at $17-billion.
SAFE Investment Ltd (Huijin), the Chinese government body that controls China Construction Bank, holds a majority stake of 57.03 per cent, directly and indirectly through its wholly owned subsidiary - China Jianyin Investment Limited.
Bank of Ameica had first purchased 8.2 per cent shares of CCB for $3 billion during the bank's maiden IPO in June 2005. In June 2008 it exercised part of its option by increasing its stake to 10.75 per cent by purchasing 6 billion more shares for approximately $HK2.42 amounting to $1.86 billion under a formula in the agreement. Under the stock purchase agreement the US banker could increase its stake to just below 20 per cent. (See: Bank of America to exercise portion of China Construction Bank option)
