Hang Seng Bank to sell $2.7 bln stake in China's Industrial Bank

HONG KONG, May 13 (Reuters) - Hang Seng Bank Ltd, a unit of HSBC Holdings (Xetra: HBC2.DE - news) , said it is selling a stake in China's Industrial Bank Co Ltd worth up to 16.8 billion yuan ($2.7 billion) to bolster its capital position and to fund expansion.

The sale of the up to 4.99 percent stake is the second chunk of Industrial Bank (Shanghai: 601166.SS - news) that the Hong Kong-based lender has put on the market this year, after it raised about $2 billion in February.

Hang Seng said in a statement late on Tuesday that it would retain 0.88 percent of the Chinese bank on completion of the deal.

A sharp rise in Hong Kong shares has encouraged some financial investors to cash out their holdings, resulting in a wave of block deals in Hong Kong over the past few weeks.

Hang Seng Bank (HKSE: 0011-OL.HK - news) , 62.14 percent-owned by HSBC, said it would sell 950.7 million shares of the Shanghai-listed lender at 17.68 yuan apiece, or a 5.96 percent discount to the previous close.

Goldman Sachs Gao Hua Securities Co Ltd and UBS Securities Co Ltd are the joint placing agents, it added.

($1 = 6.2086 Chinese yuan renminbi) (Reporting by Donny Kwok and Denny Thomas; Editing by Stephen Coates)