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Temasek gets nod for 5% BOC stake
(Standard)
Updated: 2006-01-12 13:53
Singapore's Temasek Holdings can buy 5 percent of Bank of China - half the
initial agreed stake - under a preliminary decision by the mainland's State
Council and banking regulator. They also approved stake purchases by three other
foreign investors, according to a source.
Temasek - a Singapore government investment arm already holding 5.1 percent
of China Construction Bank and 4.55 percent of China Minsheng Banking - had its
original US$3.1 billion (HK$24.18 billion) bid to own 10 percent of BOC turned
down by the mainland government on concern for China's financial stability.
Eva Ho, Temasek's spokeswoman in Singapore, was not available for comment
Wednesday. In Beijing, BOC spokesman Wang Zhaowen declined to comment.
BOC, the mainland's second-largest bank, and China's other leading lenders -
Industrial and Commercial Bank of China, China Construction Bank and
Agricultural Bank of China - have been urged by the central government to
restructure, attract foreign strategic investors and seek stock market listings
before the country's financial sector becomes fully open to foreign banks at the
end of this year.
BOC may raise more than HK$60 billion through an initial public offering in
Hong Kong before June.
Beijing-based BOC agreed last year to sell a combined 21.84 percent stake to
a Royal Bank of Scotland-led group, Singapore's Temasek, UBS AG and Asian
Development Bank.
BOC last August said it would sell a 10 percent stake to Royal Bank of
Scotland, Merrill Lynch and a foundation set up by billionaire Li Ka-shing for
US$3.1 billion.
UBS has injected US$500 million for a 1.6 percent stake in BOC, a source at
the Swiss bank said in Hong Kong Wednesday.
"The deal was closed by the end of last year," the source said. UBS will
cooperate with BOC in the mainland's investment banking and securities sectors.
An ADB source said Wednesday that "all approvals have been received and the
plans to purchase the [BOC] stake are proceeding." ADB will inject about US$75
million for 0.24 percent in BOC.
China has set 25 percent as the maximum stake that its domestic banks can
sell to foreign financial institutions. A single overseas investor can buy up to
20 percent in a Chinese bank.
BOC already has permission from the State Council, China's cabinet, for an
IPO in Hong Kong this year and the bank is expected to file a listing
application to the Hong Kong Stock Exchange very soon, a source said.
The bank's overseas listing program is waiting approval from the mainland's
China Securities Regulatory Commission.
The combined size of the planned two IPOs by ICBC, the country's largest
commercial lender, and BOC is expected to be between HK$120 billion and HK$140
billion, pushing the amount of funds raised through IPOs in Hong Kong to a
record HK$200 billion in 2006, according to accounting firm
PricewaterhouseCoopers.
ICBC's IPO is scheduled for the fourth-quarter.
CCB, the third-largest commercial lender, sold US$9.2 billion worth of shares
in October, four months after Bank of Communications - the fifth- biggest bank
on the mainland - raised US$1.9 billion in Hong Kong.
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