Bank of America Said to Sell Stake in Chinese Bank

The Bank of America Corporation, under pressure to raise additional cash, is selling a 5.8 percent stake in the China Construction Bank Corporation for about $7 billion, a person briefed on the sale said Tuesday.

The sale of the stake is Bank of America’s second as it tries to shore up its finances — it raised $2.83 billion in January by selling more than 5.62 billion Construction Bank shares.

The person briefed on the sale said the deal was almost complete but that some details remained to be finalized. The sale, the person said, is a private placement of about $7 billion, which is the amount of China Construction Bank that Bank of America became allowed to sell last week.

According to media reports, the buyers include a unit of China Life Insurance Company, the Singapore state investment group Temasek Holdings, and China’s Hopu Investment Management Company. A person briefed on the deal said, however, that the group of buyers remained fluid.

After the sale, Bank of America will still own a stake in the Chinese bank.

A Bank of America spokesman declined to comment, but in a statement, the bank said that it “intends to remain a long-term shareholder and strategic partner with China Construction Bank.” A Temasek representative said that “It is inappropriate for us to comment on unsourced reports.”

In the results of “stress tests” released by federal regulators last week, Bank of America was judged to be one of the weaker banks and ordered to raise an additional $34.9 billion. The stress tests were aimed at estimating how much each bank would lose if the economic downturn proved even deeper than expected. But regulators gave the banks a break by letting them bolster their capital with unusually strong first-quarter profits and also by letting them predict modest profits even if the economy again turns sour.

Bank of America is trying to fill its $34 billion hole by selling assets and by raising new common stock. On Friday, the bank started running a continuous stock sale, which will sell 1.25 billion shares over time. The bank’s stock has been trading around $13, and at that price, that number of shares would total to more than $16 billion.

The bank also believes it can raise $7 billion in capital simply from its own earnings in the next two quarters. And the bank may offer to exchange some publicly held preferred shares into common in late May.

At the root of the bank’s plan is a desire to avoid using money from the government to fill its capital hole. The bank has $45 billion in taxpayer funds, but it would like to return that money and not use it for the common stock because that would make the government a large shareholder.

“Our game plan is to get the government out of our bank as quickly as possible,” said Kenneth D. Lewis, the bank’s chief executive, in an investor call Mr. Lewis said he wanted to get away from “the threat of the government operating your company.”