Citic to sell stakes to remove legal block
By Winny Wang |
July 31, 2010, Saturday
|
Print Edition
Print Edition
CITIC Securities Co is to sell 53 percent of its 60 percent stake in China Securities Co to two buyers to remove a regulatory hurdle that prevents it from expanding new businesses.
The country's largest brokerage by assets will sell 45 percent to Beijing State-owned Capital Management Center for 7.29 billion yuan (US$1.08 billion) and 8 percent to property developer Century Golden Resources Group for 1.3 billion yuan, it told the Shanghai Stock Exchange yesterday.
The China Securities Regulatory Commission requires that brokerages not run the same business as subsidiaries in which they own a controlling stake. Brokerages also can't own more than 49 percent of a fund company.
CITIC Securities said in March that it planned to transfer parts of its stakes in China Securities and China Asset Management Co.
The brokerage set up China Securities in 2005 jointly with China Jianyin Investment Securities with a registered capital of 2.7 billion yuan. CITIC Securities holds 60 percent, and Jianyin owns 40 percent.
The stake sales are still awaiting approval from the securities regulator, and CITIC Securities will hold a 7 percent stake in China Securities Co after the deals succeed.
China Securities' revenue totaled 4.5 billion yuan in the first nine months of last year, and its net income reached 2.08 billion yuan.
Its total assets will fall 32.78 percent and net assets fall 6.94 percent after the stake transfer, it said.
The country's largest brokerage by assets will sell 45 percent to Beijing State-owned Capital Management Center for 7.29 billion yuan (US$1.08 billion) and 8 percent to property developer Century Golden Resources Group for 1.3 billion yuan, it told the Shanghai Stock Exchange yesterday.
The China Securities Regulatory Commission requires that brokerages not run the same business as subsidiaries in which they own a controlling stake. Brokerages also can't own more than 49 percent of a fund company.
CITIC Securities said in March that it planned to transfer parts of its stakes in China Securities and China Asset Management Co.
The brokerage set up China Securities in 2005 jointly with China Jianyin Investment Securities with a registered capital of 2.7 billion yuan. CITIC Securities holds 60 percent, and Jianyin owns 40 percent.
The stake sales are still awaiting approval from the securities regulator, and CITIC Securities will hold a 7 percent stake in China Securities Co after the deals succeed.
China Securities' revenue totaled 4.5 billion yuan in the first nine months of last year, and its net income reached 2.08 billion yuan.
Its total assets will fall 32.78 percent and net assets fall 6.94 percent after the stake transfer, it said.
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