By Fiona Lau and Elzio Barreto
HONG KONG May 20 Goldman Sachs Group Inc
launched the sale of about $1.1 billion worth of Hong
Kong-traded shares in Industrial and Commercial Bank of China
on Monday, offering its entire remaining stake in the
world's biggest bank by market value.
The sale would be the final chapter in Goldman's investment
alongside clients and employees in China's ICBC. Prior to its
2006 initial public offering, ICBC was a technically insolvent
state institution, reeling from the bad loans that had saddled
China's financial industry.
ICBC's fortunes turned after it went public, and the bank
grew along with China's economic boom. The bank's $240 billion
market value is just shy of the combined worth of J.P. Morgan
Chase & Co and Barclays.
Goldman offered the ICBC shares in a range of HK$5.47 to
HK$5.50, equivalent to a discount of up to 3 percent to Monday's
close of HK$5.64, according to a term sheet.
Goldman agreed to invest $2.58 billion in ICBC in January
2006, using internal funds that invest a mix of client, employee
and corporate cash. The bank has sold down that stake through
six deals since 2009.
If Goldman is able to sell its final stake for $1.1 billion,
total gross proceeds from the sales would be $10.1 billion.
Calculating Goldman's own profit on the stake is tricky because
not all of the investment came from its own balance sheet, and
the cost of acquiring and maintaining the ICBC stake is unknown.
Since 2006, Goldman has reported $3.5 billion in net revenue
related to ICBC in quarterly filings.
The sale would be Goldman's third in about a year. The New
York-based investment bank raised $2.5 billion from a partial
selldown of ICBC in April 2012, most of which was bought by
Singapore state investor Temasek Holdings Ltd, and
another in January 2013 worth $1 billion.