HONG KONG (Reuter) - Citic Pacific, the Hong Kong-listed investment group controlled from Peking, has completed a share placement worth HKdollars 7.1bn ( pounds 625m) to buy a portfolio of assets from its parent.

Market sources said Citic Pacific had issued 551 million new shares at HKdollars 13 each, representing almost 45 per cent of its enlarged capital.

The new issue will push its market capitalisation to HKdollars 24bn from HKdollars 17bn. The company became Hong Kong's first China- controlled blue chip last year when it became a constituent stock of the Hang Seng Index.

The funds will be used mainly to finance the purchase of a 12 per cent stake in Hongkong Telecommunications worth nearly HKdollars 10.8bn from its parent, China International Trust and Investment Corp, which holds 20 per cent of the local telephone group.

The Telecom shares are priced at HKdollars 7.80, representing a 20 per cent discount on Wednesday's closing price of HKdollars 9.70. Telecom closed 10 cents lower at HKdollars 9.60 yesterday.

The group's parent, which holds 44 per cent of Citic Pacific, will also inject a 56 per cent stake in a power plant in China's Jiangsu province and a 20 per cent stake in a Hong Kong chemical waste treatment plant into Citic Pacific.

About 60 per cent of the Citic shares have been placed with its parent and 15 per cent with Malaysia's Kuok family, a large shareholder of the group, and the Hong Kong billionaire Li Ka-shing, who has close ties with Citic Pacific.

The remaining 25 per cent, worth around HKdollars 2bn, have been placed on the open market and overseas.

Citic Pacific already owns Hang Chong Investment, which operates one of the largest local car dealerships, 12.5 per cent of Cathay Pacific Airways and 46 per cent of Hong Kong Dragon Airlines.