BEIJING (AFP) - China Construction Bank (CCB), one of the country's big four state-owned commercial banks, has sold stakes to three other state companies, the companies said, as it prepares for a stock market listing seen as key to the reform of the ailing banking sector.
The bank is currently under a state-mandated pilot reform project to restructure itself and improve its finances in preparation for a listing on either the domestic or overseas stock markets.
China Yangtze Power, Baoshan Iron Steel Co. and State Grid Corp took a combined 4.1 percent stake in the joint stock holding company set up by CCB to group together its key banking assets.
Yangtze Power, the listed arm of the giant Three Gorges Dam hydropower project, said it had invested two billion yuan for a 1.03 percent stake.
"We made the investment so that we can get priority and enjoy preferential policies for bank loans for our operations in the future," said Fu Zhengbiao, board secretary of Yangtze Power, which will become the bank's fifth largest shareholder.
Baoshan Iron and Steel, China's largest steel company, and State Grid Corp, one of the country's two state-owned power transmission companies, each paid three billion yuan for a 1.54 percent stake.
Officials at Baosteel and State Grid declined to comment on their reasons for investing.
Central Huijin Investment Co., the investment vehicle set up by the government to act as the controlling shareholder of the banks to be listed, became the largest single shareholder of the joint stock company after investing 165.5 billion yuan for an 85.2 percent stake.
The bank's Initial Public Offering (IPO) is expected to take place as early as the end of this year although no announcement as to the timing has been made.