Bank of China (BOC)
said yesterday that it has sold a 5 percent stake sale to
Singapore-based Temasek Holdings (Private) Limited, moving it one
step closer to its initial public offering (IPO).
However, there are no available details on the value of the
transaction.
BOC spokesman Wang Zhaowen said the lender had also finished its
pre-IPO talks with other strategic investors.
BOC announced late last year that, by October 6, it had signed
strategic investment agreements with the Royal Bank of Scotland
Group, Swiss bank UBS, Temasek, and the Asian Development Bank.
According to the agreements, the four were to pay a combined
US$6.775 billion for a collective 21.85 percent stake in BOC.
But BOC's parent, Central Huijin Investment Co (also known as
China SAFE Investments), which controls 100 percent of the bank,
did not approve the entire Temasek deal.
According to the agreement signed between BOC and Temasek last
August, BOC was to sell a 10 percent stake for US$3.1 billion to
the Singapore company.
"Central Huijin only approved the sale of a 5 percent stake to
Temasek," Wang said.
Beijing-based Caijing Magazine reported that Central
Huijin opposed the sale of a larger stake because it was concerned
with foreign strategic investors having too much control, and that
Chinese lenders were selling assets too cheaply.
Temasek last July paid US$1.5 billion for a 5.1 percent stake in
China Construction Bank, which raised US$9.2 billion from its Hong
Kong IPO last year.
It also bought a 4.55 percent stake in China Minsheng Banking
Corp last January.
Eva Ho, spokeswoman for Temasek in Singapore, declined to
comment but confirmed the company had completed the 5 percent deal
with BOC.
"We are now busy preparing for the final IPO," Wang said,
declining to specify the place and the time of the IPO.
Previous media reports said the bank would list in Hong Kong in
the first half of this year and in Shanghai in the second half.
BOC last August named Goldman Sachs Group Inc, UBS and Bank of
China International as its financial advisors and lead underwriters
for the planned IPO.
The bank received a US$22.5 billion capital injection from the
government in late 2003. It was one of the pilot projects for
China's reform of state-owned banks.
The bank reorganized itself into a joint-stock company named
Bank of China Limited in August 2004.
So far the bank has not released its financial results from last
year.
By the end of last June, the bank's non-performing credit rate
declined to 4.38 percent, from 5.12 percent at the beginning of the
year.
Its capital adequacy ratio stood at 10.04 percent at the end of
2004.
(China Daily February 17, 2006)