Temasek Holdings, the investment arm of the Singapore government, will buy one billion dollars' worth of shares in China Construction Bank during its planned overseas listing, state media said Monday. Temasek will pay the initial public offering (IPO) price for its stake in the bank, which is China's third-largest lender, Xinhua news agency said, citing the CCB.
The reported deal marks the second major agreement in less than a month sealed by CCB with a foreign financial institution ahead of its planned stock offer.
In June, US group Bank of America announced a deal to buy a 9.1 percent stake in CCB for three billion dollars, and it has an option to raise that to 19.9 percent.
The upper limit on total foreign shareholding in Chinese banks is currently 25 percent, while no single shareholder is allowed to hold more than 20 percent.
Xinhua said CCB had signed on the deal with Temasek's wholly owned subsidiary Asia Financial Holdings on Friday.
Subject to mutual agreement, the Temasek subsidiary will help CCB improve corporate governance and will be able to nominate candidates for election to the board of directors. Other areas of collaboration are under discussion, Xinhua said.
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