Temasek Holdings [TEM.UL] will take up Bank of America’s <BAC.N> entire entitlement in China Construction Bank’s <0939.HK> rights issue, a spokesman for the Singapore state investor said on Thursday.

CCB <601939.SS>, China’s No 2 lender, plans to raise up to 61.6 billion yuan ($12 billion) in Asia’s biggest rights issue outside Japan to shore up capital after a lending binge in 2009.

BoA, which owns just under 11% of CCB, has been looking for a buyer for its rights entitlement as it could be politically difficult for a bailed-out U.S. bank to pump more money into a Chinese bank, sources have said.

 

“We confirm we will be taking up BoA’s rights entitlement in CCB,” a Temasek spokesman told Reuters. He declined to provide further details.

 

By taking over BoA’s rights, Temasek, which already owns about 6% of CCB, will have to invest an additional US$1.5 billion to US$1.6 billion in the Chinese lender.

 

CCB is offering 0.7 shares for every 10 existing shares at 3.77 yuan per A-share and HK$4.38 ($0.72) per H-share.

 

The price of the rights, first proposed in April, is about 43% below CCB’s Hong Kong-listed H shares that currently trade around HK$7.72 per share.

 

BoA, CCB’s second-largest shareholder, has already indicated that it is unlikely to participate in the rights, news reports have said. A spokesman for Bank of America declined comment.

 

Temasek, the smaller of Singapore’s two sovereign wealth funds, had about $186 billion in assets under management as at end-March this year.

 

Besides CCB, the Singapore investor also owns large stakes in Bank of China, Singapore’s DBS Group, Standard Chartered  and India’s ICICI.