May. 28, 2009 (China Knowledge) - China's Central Huijin Investment Co Ltd, a wholly-owned subsidiary of China's US$200 billion sovereign wealth fund, China Investment Corp (CIC), on Tuesday signed an agreement with China Jianyin Investment Co to receive 20.7 billion H shares, or a 9% stake, in China Construction Bank Corp (CCB)<601939><0939> at no cost, according to a statement released by CCB on Wednesday.
Central Huijin also plans to raise its stake in the Chinese lender in the secondary market in the next 12 months.
After the share transfer, Central Huijin will hold 128 million of CCB A shares and 133.3 billion CCB H shares. Its holdings will account for 57% of CCB's total shares.
In December 2008, Central Huijin bought 46.81 million CCB A shares. In the first three months of this year, it purchased 4.2 million, 2 million and 4.79 million CCB H shares, respectively, at prices ranging from HK$3.71 to HK4.18 apiece.
In 2008, Central Huijin acquired 257 million A shares in Industrial and Commercial Bank of China (ICBC)<601398><1398> and 76.6 million A shares Bank of China (BOC)<601988><3988>, respectively.
The acquisitions will augment state control over these important financial institutions and stabilize their stock prices.
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