HONG KONG (Reuters) – Bank of America (BAC.N) sold about $7.3 billion worth of shares in China Construction Bank (601939.SS) to a group of investors, a source said on Tuesday, as the struggling U.S. bank seeks to raise cash.
A unit of China Life Insurance Co Ltd (2628.HK) (601628.SS), Singapore state investment agency Temasek Holdings [TEM.UL], 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 percent discount to their closing price on Monday. CCB’s Hong Kong-listed shares (0939.HK) ended up 1.6 percent at HK$4.96 in a broader market .HSI up 0.4 percent.
The shares fell nearly 7 percent 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 (0939.HK) could not be immediately reached for comment.
The 6 percent 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 percent.
Bank of America had been expected to sell shares in Construction Bank since the U.S. government ordered it to find $33.9 billion worth of capital following its “stress test” of 19 large U.S. banks.
The discount is wider than when Bank of America offloaded $2.83 billion worth of shares in Construction Bank in January at 12 percent below the Chinese bank’s last trading price. That same month, Royal Bank of Scotland (RBS.L) sold a $2.4 billion stake in Bank of China (3988.HK)(601988.SS) at a 7.6 percent discount.
By Michael Flaherty
(Additional reporting by Tony Munroe, Clare Jim, and Victoria Bi in Hong Kong and Saeed Azhar in Singapore; Editing by Jonathan Hopfner and Anshuman Daga)