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CITIC Capital, backed by the powerful CITIC Group, which is directly led by the cabinet, will issue new shares only to CIC, and the deal could help the fund manager boost its capital base to HK$5 billion from the current HK$3 billion, said the sources with direct knowledge of the matter.

Beijing's influential Caijing magazine first reported the alliance between CITIC Capital and CIC at the weekend. Reuters reported in Feburary that CIC was in talks to buy up to half of CITIC Capital. [ID:nHKG22741]

(Reporting by George Chen and Samuel Shen; Editing by Jonathan Hopfner)