December 5, 2014 / 3:20 AM / 4 years ago

UPDATE 1-CITIC in early talks with CP, Itochu about share placement-source

* CITIC Ltd shares jump as much as 6.3 pct

* CITIC Group completed ambitious reform in August (Recasts with source confirmation, share reaction)

HONG KONG, Dec 5 (Reuters) - CITIC Ltd is in early talks with companies including Japan’s Itochu Corp and Thailand’s Charoen Pokphand Group (CP) about a large share placement, a person familiar with the matter said, as the Chinese state-owned conglomerate tries to broaden its investor base.

CITIC Group, China’s oldest and biggest financial conglomerate, completed an ambitious restructuring in August by injecting about $36 billion worth of assets into a Hong Kong-listed unit. The move was part of Chinese President Xi Jinping’s reforms to state-owned enterprises.

To part-fund that acquisition and increase the company’s free float CITIC Ltd, formerly known as CITIC Pacific, conducted a share placement raising about $5.1 billion from 27 investors including Och-Ziff Capital Management Group LLC, sovereign wealth fund Qatar Holding and Singapore state investor Temasek Holdings.

CITIC Ltd said on Friday that it has continued discussions with “investors who remain interested in cooperation with the company,” but the talks were at a very preliminary stage and the company has not entered into any binding agreement.

CITIC Ltd shares gained 3.6 percent to HK$14.40 in mid morning trade, compared with a 0.6 percent rise in the benchmark Hang Seng share index. They traded as high as HK$14.80.

Itochu Corp declined to comment on the possible deal while CP Group did not immediately respond to a request for comment.

The source familiar with CP Group and Itochu’s interest declined to be identified as the information is not public.

In August, CITIC Ltd completed its acquisition of 100 percent of the chief operating arm of CITIC Group in a deal hailed as the biggest state-owned enterprise reform in China. CITIC Pacific was renamed CITIC Ltd after the deal and traded under the new name from September 1.

CITIC Group was established in 1979 by Rong Yiren, one of the few industrialists to stay behind in the mainland after the 1949 revolution. The company was set up with the support of former leader Deng Xiaoping. (1 US dollar = 7.7517 Hong Kong dollar) (Reporting By Anne Marie Roantree, Denny Thomas and Elzio Barreto; Additional reporting by Osamu Tsukimori in Tokyo; and Viparat Jantraprapaweth in Bangkok; Editing by Rachel Armstrong)

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