November 15 -- Bank of America (NYSE:BAC) plans to sell the bulk of its stake in China Construction Bank (601939.SH, 0939.HK) in order to replenish working capital, reports Shanghai Securities News, citing an announcement by Bank Of America.

Bank of America has reached a private agreement with an institutional investor to sell 10.4 billion H shares, a transaction which is estimated to generate after-tax profit of $1.8 billion.

The stake sale is expected to be completed this month, following which Bank of America’s shareholding in China Construction Bank will be reduced to approximately one percent.

Bank of America owned 12.5 billion shares of China Construction Bank as of end September.

According to the chief financial officer of Bank of America, Bruce Thompson, the sale of the stake will boost the bank's Tier 1 capital by 24 basis points, or about $2.9 billion.

Bank of America had earlier this month informed CCB that it was mulling the sale of its remaining stake in the latter in order to supplement its capital base.

Shares of CCB fell 0.62 percent to trade at 4.83 yuan per share at 10:14 today.
 

Source:CapitalVue