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BofA confirms CCB shares sale

Updated: 2011-08-30 17:02

By Hao Yan (chinadaily.com.cn)

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Bank of America Corporation (BofA) said Monday it will sell half of its holdings in China Construction Bank (CCB). The 13.1 billion shares transaction is expected to bring in $3.3 billion for BofA's capital base.

Industry insiders predict that the buyer is Temasek Holdings, Singapore's sovereign wealth fund. The transaction is expected to be complete by the end of September, Economic Information Daily reported Tuesday.

BofA currently holds 25.58 billion shares totaling 10.23 percent of CCB, and Temasek's Fullerton Investment & Credit Guarantee Co Ltd holds 14.13 billion shares, or 5.65 percent, of CCB.

BofA's capital demand and concerns over the Chinese government's local financing system have been speculated as the two main explanations for the initiative, an analyst told the newspaper.

Head of China Construction Bank Zhang Jianguo said on August 22 in Hong Kong that BofA's holdings would be no less than 5 percent, and the two banks are negotiating strategies for the cooperation after 2012. The two banks' current strategic cooperation will come to an end by 2012.

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