bodyType

customContents

entityId

entityUuid

articlePageQuery

filter

article

articleBaseAdvertisingInfoArticle

articleListArticle

articleSeoArticle

hooksArticleAcknowledgementGateOverlayArticle

hooksTrackPageViewArticle

hooksContentInterestArticle

articleLinkingDataContent

hooksAmpRedirectArticle

articleSchemaContent

liveArticle

advertZone

sentiment

contentLock

topics

types

sections

paywallTypes

createdDate

publishedDate

sponsorType

urlAlias

moreOnThisArticles

commentCount

authorLocations

authors

corrections

displaySlideShow

multimediaEmbed

printHeadline

seriesContainer

articleSpeeches

socialHeadline

headline

images

flag

firstTopic

glossary

flattenTypeIds

image

relatedLinks

relatedNewsletters

__typename

sponsor

pdfFiles

seriesReverseOrder

series

disableOffPlatformContent

published

updatedDate

summary

subHeadline

body

keywords

readingTime

customTimezone

liveContents

SCMP Reporter

Royal Bank of Scotland Group is  trying to  offload its entire 4.3 per cent stake in Bank of China for as much as HK$18.4 billion through a share placement, ending a strategic investor relationship with the mainland lender that began in 2005.
The British  group hired Morgan Stanley and ABN Amro to handle the   sale after the market closed yesterday,  offering 10.8 billion old BOC shares through partly owned RBS China at HK$1.68 to HK$1.71 per share,  a sale document obtained by fund managers said.
The price range  is at a discount of as much as 9.19 per cent  to the stock's close of HK$1.85 yesterday.
The proposed  price range was narrowed from a discount of  10 to 12 per cent the two bookrunners first  offered to the market for the proposed block sale.
RBS would reap a return of at least 48 per cent or HK$5.9 billion in disposal gains  from the  stake in BOC, which  it acquired in August 2005, just 10 months before the mainland bank  listed in Hong Kong in June 2006.
The share sale came  a day after RBS obtained BOC's consent to sell  on Monday after the three-year lock-up  period on the shares ended on December 31.
The two arrangers had targeted long-only funds, wealthy individuals and sovereign funds for anchor investors before  placing the deal to other institutional investors, sources said.
'It's risky [for this   sale  if the arrangers] didn't get enough tickets from the anchor investors,' a rival banker said.
'You must remember that this   is the fourth foreign strategic investor stake sale since the beginning of the year and everybody knows that there will be more coming to the market in the near term.'
In addition to  RBS, one source  said three other investors in the consortium of RBS China, DE Shaw, Oaktree Capital and Och-Ziff Capital are seeking to  dispose of BOC shares in the near term.
It is a strategic move for RBS to  divest from BOC despite its business partnership with the mainland bank.
They operate a wealth management venture  on the mainland,  which gives  RBS an opportunity to tap the  country's booming consumer banking sector.
RBS may use the  gain  from the disposal of its BOC stake to help repair a balance sheet crippled by more than #7 billion (HK$79.63 billion) of write-downs  last year.
'The entire  disposal can help  remove the near-term overhang on BOC, but I'm afraid that investors will still be sceptical  of mainland banking stocks, as the lock-up  period  for shares in  Industrial and Commercial Bank of China and  its peers will expire in the coming months,' said Lee Yuk-kei, a banking analyst at Core Pacific-Yamaichi.
'The sector sentiment may be dampened  by overhang concerns.'
At only  eight trading days into the new year,  foreign investors including RBS  have cashed out more than HK$50 billion by offloading their strategic investments in mainland lenders.
Bank of America Corp and Li Ka-shing last week sold stakes in China Construction Bank Corp and BOC, enabling them to reap a combined HK$26 billion,  while Swiss bank UBS  completed the  sale of its 1.33 per cent stake in BOC to institutional investors on January 1.
Cashing out
Value of mainland bank stakes foreign investors have sold this year, in HK$: $50b



HK$18.4b stake sale ends RBS ties with BOC