Bank of America to sell shares in China's CCB
2011-08-30 10:40:19
Troubled US financial giant Bank of America said Monday it will sell about half of its 10 percent stake in China Construction Bank for approximately US$8.3 billion in cash.
The sale will help BofA strengthen its capital base and move closer to the Basel III standards imposed by global regulators, said Bank of America, which has suffered a steep decline in its share price in recent weeks.
"Our partnership with China Construction Bank has been mutually beneficial," Bank of America chief executive Brian Moynihan said in a statement.
Bank of America did not identify who was acquiring its shares of CCB, describing the buyers only as "a group of investors".
The New York Times reported on Friday that BofA was in talks with a group of Asian sovereign wealth funds and private equity firms like Blackstone and KKR about buying the stake.
Under the terms of the deal, which is expected to close in the third quarter of 2011, BofA will sell 13.1 billion shares of CCB and make an after-tax gain on the sale of US$3.3 billion, the bank said.
The largest US bank in terms of deposits, BofA has struggled to recover from the 2008 financial meltdown.
It posted a US$9.1 billion loss last quarter, mostly caused by a huge US$8.5b settlement to resolve claims stemming from its issuance of mortgage-backed securities that went sour during the crisis.
Until Monday, Bank of America had refused to comment on speculation that it was considering a sale of its stake in Beijing-based CCB, which is majority-owned by the Chinese government.