Citigroup to sell stake in China Guangfa Bank
(26 October 2015 – China) Citigroup is rumoured to sell its minority stake in China Guangfa Bank, which it acquired in 2006.
Sources told Wall Street Journal that a deal is likely to be reached in the next few months.
In 2006, the New York bank led a group of five other investors in 2006 to purchase an 85.6 percent stake in Guangfa Bank, for around US$3.1 billion (A$4.5 billion).
Two of the investors— China Life Insurance Co. and Citic Trust Co.—are currently among the companies in negotiations to buy Citigroup’s minority stake according to the sources.
Citigroup’s 20 percent stake at the time was valued at about $620 million.
China Life, China’s largest insurer by premiums, also took a 20 percent stake in Guangfa Bank as part of the 2006 deal, while Citic Trust, a unit of state-run conglomerate China Citic Group, bought 12.9 percent.
According to recent reports, Citigroup has attempted to take Guangfa Bank public, including an effort in 2011 to raise capital from listings in both Hong Kong and Shanghai.
At the end of 2014, the Chinese lender had US$266 billion in total assets, according to company data, less than competitors China Merchants Bank and Shanghai Pudong Development Bank.
Subscribe