Yangtze Power to invest in bank

Mainland-listed China Yangtze Power plans to invest RMB 2 billion (US$240m) in China Construction Bank Holding (CCBH) as a founding shareholder, according to the South China Morning Post. China Construction Bank, Yangtze Power's creditor, plans to use CCBH as a listing vehicle for its planned public offering in 2005. The investment would give Yangtze Power an estimated 0.4% stake in CCBH after the planned listing. Analysts said that the move lacks any business justification and that it would make more sense for Yangtze Power to use any excess cash to pay down its own debt. A company spokesman denied that the power company was under government pressure to invest in CCBH.