Hang Seng Bank Ltd. (00011.HK) will sell a stake in Industrial Bank Co. Ltd. (601166.CN) for as much as US$2 billion to boost capital, Bloomberg News reported.
The transaction will involve the sale of as many as 952 million shares, or a 5 percent stake, at 13.36 yuan (US$2.14) each, Hang Seng Bank said in a stock exchange filing. That represents a deal size of 12.73 billion yuan and a discount of about 7 percent to the closing price of Industrial Bank on the Shanghai Stock Exchange, the news agency said.
The sale to institutional investors was an opportunity “to strengthen the bank’s regulatory capital position and ability to meet future regulatory requirements”, Hang Seng said.
The lender will keep a 5.87 percent stake after the disposal and regularly review the holding, it added.
Shares of Fuzhou-based Industrial Bank closed up 1.8 percent at 14.37 yuan before the announcement. The stock has climbed 52 percent in the past year, giving the company a market value of US$43.9 billion, the report said.
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