Bank of America to double stake in China Construction BankNovember 18th, 2008 - 6:12 pm ICT by IANS
New York, Nov 18 (DPA) Bank of America Corp. said Monday it would almost double its stake in China Construction Bank Corp, ending speculation that it would dump its investment as a result of the widening global financial crisis.The US bank is increasing its stake to 19.1 percent, or 44.7 billion shares, from 10.8 percent. The shares cannot be sold until August 29, 2011, without the Chinese bank’s consent.
Bank of America first bought a three-billion stake in China Construction in June 2005. That holding is now valued at $14.5 billion, as of Sep 30, Bloomberg financial news agency reported.
In a statement, Bank of America said it planned to be a “a long-term and significant strategic investor” in China Construction.
Bank of America received $15 billion from the US government as part of a $250-billion rescue package.
“China Construction Bank is tightly tied to the government and they are a preferred bank,” Richard Wottrich, managing director of Dresner Partners, a Chicago-based investment banking firm, told Bloomberg. “China will probably return the favour someday by doing something for Bank of America if they need help.”