JERUSALEM - Continuing to privatize major bank holdings, the Israeli government has sold 22.4% of Bank Leumi.

The public offering on Aug. 29 was oversubscribed 500 times, bankers and traders said.

If all warrants attached to the shares - exercisable in seven and 10 months - were used, the government's stake would be reduced to 72.6%, treasury sources said.

The issue raised about $174.52 million cash for the government immediately. Another $209.42 million will go to the government if all warrants are exercised.

Bank Leumi, Israel's second-largest, has $28.4 billion of assets, including Bank Leumi Trust Co. of New York.

The government became an indirect shareholder in Israel's biggest banks - Bank Hapoalim. Bank Leumi, Israel Discount Bank, and Bank Mizrahi - in a bailout 10 years ago. It had planned to sell the shares back to the public within 10 years.

The government sold 20% of its shares in Bank Hapoalim, the country's largest bank, in May. In June it sold 60% of Union Bank, jointly owned with Bank Leumi, to a group of private investors.

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