In order to repay the amount it owes to the US government, Goldman Sachs is chalking out plans to sell up to $1.9 billion worth of shares in Industrial and Commercial Bank of China (ICBC), after the stock climbed 29% in the last two months.
Goldman is in advanced talks with institutional investors to sell 3.03 billion Hong Kong-traded shares, or a 0.9% stake in the Chinese bank, at HK$4.80 to HK$4.90 each. The US bank is aiming as much as 27% more for its ICBC stock than Allianz SE and American Express got. The sale will leave Goldman with a 4% holding in ICBC, which it will retain until at least next April.
Goldman Sachs had already raised $5.75 billion in April by selling its shares and said it would use the proceeds plus additional resources to pay back the $10 billion the company received from the US Treasury’s Troubled Asset Relief Program in October 2008.
Douglas Ciocca, Managing Director at Renaissance Financial Corp. in Leawood, Kansas, which manages $1.7 billion including Goldman Sachs shares, said: “It’s very opportunistic, and obviously they’re not the first to come to the market to do that. It’s a prudent reallocation of capital because they still have a big remaining stake in there.”
Goldman acquired a 4.9% stake in ICBC in 2006 amid a wave of investment by overseas groups into China’s then moribund banking sector.
