China Construction Bank Corporation (601939) announced on 28 May that Bank of America will buy 6 billion additional H-shares of CCB. Bank of America will exercise its call option, which was granted in 2005 based on the Share and Option Subscription Agreement with Central Huijin Investment Company, a state-owned major shareholder of CCB. Bank of America will be able to buy 6 billion H-shares, or 2.57% of CCB, at the price of HKD 2.42 per share from Central Huijin Investment Company. The transaction is expected to be completed by 5 Jun 2008.

According to public information, in Jun 2005 Bank of America purchased 17.48 billion shares of China Construction Bank and subscription options for USD 2.5 bln. In Sep 2005 BoA purchased an additional 1.65 billion shares of CCB for USD 500 mln. BoA thus held 19.13 billion shares, or 8.19% of CCB. Call options held by BoA will enable it to increase its stake in CCB to 19.9%.

After this option exercise, Central Huijin Investment Company and its wholly-owned subsidiary China Jianyin Investment Limited, will hold 152.84 billion H-shares of CCB, accounting for 65.04% of total issued shares of CCB. Bank of America will hold 25.13 billion H-shares of CCB, accounting for 10.75%.

Apart from certain exceptions, the 6 billion H-shares cannot be transferred before 29 Aug 2011 without written consent from CCB. On 27 May H-shares of CCB closed at HKD 6.65 per share, and A-shares of CCB closed at RMB 7.06 per share.

Source: China Business News

Date: 28 May 2008

CN01/MZ/KM/MM