China Knowledge reported that Bank of China Ltd has secured approval from shareholders to raise up to CNY 60 billion through a rights issue in Hong Kong and Shanghai to replenish its capital.

The bank said in a statement that it plans to issue as much as 1.1 new shares for every ten existing A shares and H shares.

Mr Xiao Gang chairman of BOC said that the rights issue plan which is still subject to regulatory approvals is expected to be finished by the end of this year.

BOC plans to maintain its capital adequacy ratio at 11.5% in the period between 2010 and 2012. By the end of the first quarter this year, the bank CAR was 11.09% and its core CAR was 9.11%.

In June, BOC issued 40 billion in convertible bonds in the domestic market, which was expected to boost its CAR in 2010 by 61 basis points to 11.7%.

Central Huijin which holds a 67.53% stake in BOC earlier said that it will fully support the bank fundraising plan. Central Huijin is estimated to spend around CNY 40.5 billion for participating in BOC's rights issue plan.

(Sourced from China Knowledge)