Goldman Sachs Selling 3.03bn ICBC Shares

Goldman Sachs Group, Inc. (NYSE: GS) plans to sell 3.03 billion H shares of Industrial and Commercial Bank of China (ICBC, SHSE: 601398, and SEHK: 1398), according to a sales document it filed to fund managers on June 1.

The shares, accounting for 0.9 percent of the Chinese commercial lender's total capital stock and 3.7 percent of the H shares outstanding, will be sold at HKD 4.8 to HKD 4.9 per share. The settlement date is June 4, 2009. Via the deal, the Wall Street giant will cash in at most HKD 14.86 billion, or USD 1.92 billion, which is said to be used to ease pressure from financial strain.

Like other American banks, Goldman Sachs is under pressure from financial problem, said industry observers. So, it is wise for it to raise capital via selling stake held in other companies, currently. Hurt by the global financial crisis, the company shifted itself into a bank holding firm after it received USD 10 billion injection from the US government. Sources said that it had been ready to repay the USD 10 billion and the aforesaid share sale is a part of the plan. Statistics show that it raised USD 5.75 billion via selling shares in April 2009.

Data shows that the lock-up period of shares held by Goldman Sachs, Allianz Group and American Express Co. in ICBC expired on April 28, 2009. Allianz Group sold 3.22 billion ICBC shares with a four percent discount on the day. American Group also sold 638 million such shares with a similar discount.

Goldman Sachs had a total of 16.48 billion ICBC shares as at the end of 2008, accounting for 4.9 percent of the latter's total capital stock. It intends to prolong the lock-up period of 80 percent of the shares by one year, J. Michael Evans, vice chairman of the New York-listed firm, said on March 25. That is to say the lock-up period of about 13.18 billion shares it holds in the Chinese banking titan will expire on April 28 next year. The aforesaid 3.03 billion shares are a part of the other 20 percent.

Shares of ICBC surged by 29 percent in the past two months. On June 1, it rose 4.71 percent to close at HKD 5.11.

Connie Ling, a spokesman for Goldman Sachs Hong Kong, declined to make comment.

(USD 1 = CNY 6.82 and USD 1 = HKD 7.75)

Source: www.cnstock.com (June 02, 2009)

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