Shares of Huaxia Bank rose 1.21 percent to 11.68 yuan in morning trading in Shanghai Thursday, after it officially told the market that it had received approval for plans to raise up to 20.8 billion yuan (3.2 billion U.S. dollars) through a private placement.
In a statement filed with the Shanghai Stock Exchange, the mid-size lender said China's securities regulator had approved its plan to issue 1.86 billion new shares at 11.17 yuan per share to its three largest shareholders.
Deutsche Bank, which owns a 17-percent stake in Huaxia and is its largest shareholder, would acquire 514 million new shares in the private placement, raising its stake to 19.99 percent.
Chinese steelmaker Shougang Group and grid operator State Grid Corp. of China, the second and third largest shareholders, would take 691 million and 653 million new shares, respectively.
The statement said such deals were usually completed within six months of approval by the China Securities Regulatory Commission.
The proceeds would be used to replenish Huaxia's capital base, following increased lending in the past two years to buoy the economy.
