Huaxia Bank shares drop by daily limit, trading suspended on fund-raising plan

16:15, May 06, 2010      

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Huaxia Bank Co.'s shares dived by the 10-percent daily limit Thursday after the bank said it will raise 20.8 billion yuan (3.05 billion U.S. dollars) through a private share replacement.

Huaxia Bank shares stood at 11.45 yuan per share when trading was suspended.

A total of 1.86 billion shares will be sold to its three major shareholders - Shougang Group, Deutsche Bank and State Grid Group - at 11.17 yuan per share, the bank said in a statement filed with the Shanghai Stock Exchange Thursday.

The proceeds will be used to replenish the bank's capital, the statement said.

After the deal, with a 20.98-percent stake, Shougang Group will replace Deutche Bank as the bank's largest shareholder. Shougang currently holds a 13.98 percent stake.

At the end of 2009, the bank reported a capital adequacy ratio (CAR) of 10.2 percent, just over the regulatory requirement of 10 percent.



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