CITIC Resources announced a proposal to sell a 0.86% stake in Alcoa Corporation for a minimum of $112 million, capitalizing on its investment in the U.S. aluminum producer.
The proposed sale was detailed in a company announcement, outlining the plan to divest a significant portion of its holdings in the New York-listed company.
According to the filing, CITIC Resources intends to sell up to 551,300 shares and 1,691,900 depositary receipts of Alcoa. Based on a minimum selling price of $50 per share, the total consideration would be at least $112 million, or approximately HKD 875 million. The company expects to record an accumulated gain of around HKD 162 million from the sale. Prior to the transaction, CITIC Resources held a 1.58% equity interest in Alcoa; this will be reduced to 0.72% after the sale is completed.
The divestment allows CITIC Resources to lock in a considerable profit and increase its cash position. For Alcoa, the introduction of a large block of shares to the market could create selling pressure on its stock (AA.US) in the near term.
This move allows CITIC to realize a significant gain from its investment. Investors will now watch how the increased liquidity of Alcoa shares is absorbed by the market and monitor CITIC Resources's future strategy for its remaining 0.72% stake.
This article is for informational purposes only and does not constitute investment advice.
