UPDATE 2-Goldman-led consortium takes stake in China's ICBC http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2006-04-29T035353Z_01_PEK139676_RTRIDST_0_FINANCIAL-BANK-ICBC-UPDATE-2.XML
Fri Apr 28, 2006
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BEIJING, April 29 (Reuters) - China's biggest bank, the Industrial and Commercial Bank of China, has sold a 9 percent strategic stake to a consortium led by Goldman Sachs (GS.N: Quote, Profile, Research) for $3.8 billion, the Chinese lender said on Saturday.
ICBC, which is planning a $12 billion initial public offering later this year, said in a statement the stake sale was the largest one-off investment by overseas investors in China's financial sector so far.
Beijing is trying to shore up a banking sector that has traditionally been marred by piles of bad loans, pushing banks to bring in foreign investors and list shares on the stock markets.
ICBC said the consortium, which also includes American Express (AXP.N: Quote, Profile, Research) and Allianz (ALVG.DE: Quote, Profile, Research), had purchased 24.2 billion new shares -- giving it an 8.89 percent stake -- in a transaction that was completed on Friday.
The figures showed that the foreign investors had paid about $0.16, or HK$1.22, for each share.
"The completion of the transaction helps lay a sound foundation for ICBC to diversify its ownership structure, expand strategic cooperation and improve corporate governance," the statement said.
The bank said introduction of the foreign investors would help ICBC boost its capital base and, more importantly, help it to shore up overall competitiveness.
Bank of China [BOC.UL], the country's second-largest bank which has also sold strategic stakes to foreign investors, is set to raise $8 billion next month in an initial public offering (IPO) in Hong Kong.
A nationalist backlash unfolded after China Construction Bank Corp. (0939.HK: Quote, Profile, Research) sold $9.2 billion worth of shares in Hong Kong last October in a record offering for a mainland company. Some Chinese critics have said Chinese lenders had sold their shares too cheaply to foreign investors and that allowing unchecked stake sakes could pose a threat to China's national security.
Chinese regulators have dismissed such worries and pledged repeatedly that the government will not hand over control in major commercial banks to outsiders.
Foreign investors are still subject to the 25-percent ceiling on the size of stake they can buy in a Chinese bank.
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