Huijin to back CCB's rights issue
0 
Central Huijin Investment Ltd., the investment arm of China's sovereign wealth fund, China Investment Corp., will spend approximately 43 billion yuan in the fund-raising plan of the state-owned China Construction Bank (CCB), the Shanghai Securities News said Tuesday.
CCB, the world's second-largest lender by market value, announced on April 30 a plan to raise 75 billion yuan via a rights issue in the Shanghai and Hong Kong stock markets. The funds raised will be used to replenish its capital funds and to meet the capital adequacy ratio set by China's banking authorities.
By the end of the first quarter, Central Huijin held a 57.09-percent stake in CCB and as much as a 67.53-percent stake in Bank of China.
Bank of China sold 40 billion yuan worth of convertible bonds in an effort to raise more funds. However, Central Huijin didn't participate in the bank's bonds sale.
CCB's fund-raising plan is still awaiting the approval of its shareholders and banking authorities.
By the end of the first quarter, CCB's capital adequacy ratio and core capital adequacy ratio stood at 11.44 and 9.17 percent, down 0.26 and 0.14 points from the end of 2009. China's banking authorities require all large commercial banks to secure a capital adequacy ratio of 11.5 percent.
China's business press carried the story above on Tuesday. China.org.cn has not checked the stories and does not vouch for their accuracy.
Go to Forum >>0 Comments