BofA sells $7.3B stake in China Construction Bank

[Coventina]

Source: Associated Press

HONG KONG (AP) — Bank of America Corp. sold part of its stake in China Construction Bank for some $7.3 billion as the U.S. lender seeks to raise billions more to help withstand the recession.

The U.S. bank unloaded more than 13.5 billion shares, or a nearly 6 percent stake, in China Construction, the Chinese company said in a statement to the Hong Kong stock exchange late Wednesday.

Buyers included China Life Insurance and its affiliates, as well as an unidentified foreign fund and BOCI Asia, an investment banking arm of the Bank of China. China Construction is the country's second-biggest lender.

The Charlotte, N.C.-based bank was widely expected to sell some of its stake after a lockup period expired this month and the U.S. government's "stress tests" showed the bank was the country's most undercapitalized — needing almost $34 billion more.



Read more: http://www.google.com/hostednews/ap/article/ALeqM5isHfJECB2yJzuf_7uPxK9m855HYgD985V29G1

[InfiniteThoughts]

1. 7 down, 27 to go ...

why not put it's entire stake in the company. that will fetch another $3.65 bn.

Kudos to the BoA team for the investment. A $3 bn investment for 9% has turned into a $11 bn investment in 4 years.

Edit: BoA purchased an additional 1.75% for $1.87 bn in 2008. If sold (in 2011) at the same valuation as the above deal, it would fetch - $2.13 bn - still a $260 mn profit.