China Construction Bank Corporation (“China Construction Bank” or “CCB”) has received a notification from Bank of America Corporation (“BAC”), stating that BAC intends to exercise a call option pursuant to the share and option purchase agreement entered into between BAC and China SAFE Investments Limited (“Huijin”) on 17 June 2005. BAC proposes to purchase 19,580,153,370 H-shares of the Bank from Huijin. The exercise price per share will be 1.2 times of the audited net assets value per share as of September 30, 2008. The transaction is planned to be taken place before 30 November 2008.

It is mentioned in the CCB's announcement that, upon completion of such exercise, Huijin will hold directly, and indirectly through its wholly owned subsidiary, China Jianyin Investment Limited, an aggregate number of 133,262,144,534 H-shares of the Bank, representing approximately 57.03% of the Bank’s issued share capital and BAC will hold 44,713,127,716 H-shares of the Bank, representing approximately 19.13% of the Bank’s issued share capital.

It is learnt that the exercise price per share was determined the higher of the two prices between “1.2 times of the latest audited NAV” and “1.0712 times of the H-share IPO price”. As of 30 September 2008, the audited NAV of CCB share was RMB2.05, producing an exercise price per share of RMB2.46 or approximately HK$2.80 for BAC. On 27 October, with the expiry of the locked-up period for the cumulative 19.133 billion CCB shares acquired by BAC when it first invested in CCB and at the time of CCB’s IPO, the closing price of CCB H-share was HK$2.62, which had once dropped to around HK$2.5 and was significantly lower than the present exercise price.

It has been pointed out that, for the 19.58 billion CCB shares BAC just acquired, a locked-up period has also been set. The expiry date of this locked-up period is 29 August 2011.