Pudong Development Bank to sell 20% stake to China Mobile
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Shanghai Pudong Development Bank, a mid-sized Chinese lender, has agreed to sell a 20-percent stake in itself to telecom giant China Mobile, the Shanghai Securities News reported Saturday.
The Shanghai-based bank's shares were suspended from trade Friday when the bank announced it may bring in a new strategic investor.
The bank, partly owned by Citigroup Inc, will raise about 40 billion yuan (5.86 billion U.S. dollars) through the sale of 2.2 billion shares to the world's biggest mobile phone operator.
Shares of the bank have under performed recently as investors fretted its low capital adequacy ratio may restrict opportunities for expansion, a Guotai Junan Securities report said Friday.
The deal will raise the lender's core capital adequacy ratio by 4 percent to over 10 percent, the report said.
The bank will make an announcement and its shares will resume trade on March 4 at the latest, the bank said Friday in a statement filed with the Shanghai Stock Exchange.
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