HONG KONG--Goldman Sachs Group Inc. is raising up to US$1.9 billion from the sale of a portion of its stake in Industrial & Commercial Bank of China Ltd. in a placement Monday, according to a term sheet seen by Dow Jones Newswires.
Goldman has made no secret of its desire to repay the $10 billion in capital it received from the U.S. government in October, and the ICBC stake sale will help the bank bolster its cash position without dipping into current cash reserves.
Goldman declined to comment.
The 3.03 billion Class H shares, representing 3.7% of ICBC's H shares, are being sold at 4.80-4.90 Hong Kong dollars (62 to 63 U.S. cents) each, a 4%-6% discount to their closing price Monday of HK$5.11, the term sheet said.
Class H shares are Hong Kong-listed shares issued by a company registered and based in China.
Goldman Sachs, a strategic investor in ICBC with a 4.9% holding, had pledged this year not to sell 80% of its stake before April 28, 2010. But that left open the sale of the remaining fifth of that stake in China's largest bank by assets, or the 3.03 billion shares being sold Monday.
Foreign investors, including Bank of America Corp., Royal Bank of Scotland Group PLC, and the Li Ka Shing Foundation have sold billions of dollars worth of Chinese bank shares since the beginning of the year to shore up their balance sheets.
In late April, Allianz SE and American Express Co. sold half the shares they owned in ICBC in a private placement, raising a total of US$1.91 billion.
Goldman is the sole bookrunner on the deal.
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