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Hua Xia Bank Co's shares dived by the 10-percent daily limit Thursday after the bank said it will raise 20.8 billion yuan ($3.05 billion) through a private share replacement.
Hua Xia Bank shares stood at 11.45 yuan per share when trading was suspended.
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The proceeds will be used to replenish the bank's capital, the statement said.
After the deal, with a 20.98-percent stake, Shougang Group will replace Deutche Bank as the bank's largest shareholder. Shougang currently holds a 13.98 percent stake.
At the end of 2009, the bank reported a capital adequacy ratio (CAR) of 10.2 percent, just over the regulatory requirement of 10 percent.