BofA sold CCB stake to Chinese consortium
China’s State Administration of Foreign Exchange, the National Social Security Fund and CITIC Securities have emerged as the buyers of the 5% stake in China Construction Bank (CCB) sold by Bank of America (BofA) for $8.3 billion, the Financial Times reported, citing unnamed sources close to the deal.
The Chinese consortium teamed up with Temasek Holdings and Qatar Investment Authority to purchase the stake, which represents half of BofA's 10% holding on CCB. Following the sale, Temasek is now the Chinese bank's second-largest shareholder with an approximately 7% stake, with BofA dropping to third.
The 13.1 billion-share selldown is part of BofA's efforts to shed non-core assets and boost its tier-one capital, and takes the bank closer to the estimated $50 billion it needs to add to capital reserves in order to comply with Basel III requirements. BofA will record a post-tax gain of around $3.3 billion from the CCB sale.
Temasek Holdings, Singapore's second-largest sovereign wealth fund, reduced its holdings in both CCB and Bank of China in July to scale back on its financial sector exposure. It raised around $3.6 billion in the process, of which more than $1 billion came from CCB shares, which sold at a higher price than BofA's selling price per share, the Financial Times noted.
BofA paid $3 billion for a 9.9% stake in CCB ahead of the bank's IPO in 2005. It still holds 11.5 billion of the 23.6 billion shares that exited their lockup period on August 29.
More on Greater China
Latest News
Asian GPs slow implementation of ESG policies - survey
Asia-based private equity firms are assigning more dedicated resources to environment, social, and governance (ESG) programmes, but policy changes have slowed in the past 12 months, in part due to concerns raised internally and by LPs, according to a...
Singapore fintech start-up LXA gets $10m seed round
New Enterprise Associates (NEA) has led a USD 10m seed round for Singapore’s LXA, a financial technology start-up launched by a former Asia senior executive at The Blackstone Group.
India's InCred announces $60m round, claims unicorn status
Indian non-bank lender InCred Financial Services said it has received INR 5bn (USD 60m) at a valuation of at least USD 1bn from unnamed investors including “a global private equity fund.”
Insight leads $50m round for Australia's Roller
Insight Partners has led a USD 50m round for Australia’s Roller, a venue management software provider specializing in family fun parks.