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Temasek may cut losses on troubled Pakistan venture
NIB Bank, in which it owns 88.6%, has suffered huge losses despite cash injections
By CONRAD TAN
(SINGAPORE) Temasek Holdings is looking to sell its majority stake in troubled Pakistan lender NIB Bank, just months after it injected over $100 million into the bank.A source told BT that Temasek was looking to offload its 88.6 per cent stake in NIB, which recently saw its founding president and chief executive replaced.
The bank has suffered a cumulative net loss of some 17 billion Pakistan rupees (S$243 million at current exchange rates) since Temasek first invested in the bank in early 2005, according to BT's calculations.
The Industrial and Commercial Bank of China has shown interest in buying Temasek's stake in NIB, Pakistan newspaper The Express Tribune reported on Tuesday, citing banking sources.
'We don't comment on market speculation,' a Temasek spokesman said in response to questions from BT.
Temasek owns some 9.13 billion shares, or an 88.6 per cent stake, in NIB through its wholly owned, indirect subsidiary Bugis Investments (Mauritius), according to NIB's latest financial statement.
Yesterday, NIB shares were trading at 1.49 rupees each, valuing Temasek's stake at 13.61 billion rupees, or about $194 million. That's far short of the estimated $560 million that Temasek has paid to accumulate the stake, BT's analysis of NIB's and Temasek's financial statements shows.
Temasek bought a 25 per cent stake in NIB in February 2005, then quickly raised it to 73 per cent in July 2005. It paid a total of US$57 million to acquire that majority stake, its first direct investment in Pakistan, according to Temasek's 2005 annual report.
Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.
NIB Bank, in which it owns 88.6%, has suffered huge losses despite cash injections
By CONRAD TAN
(SINGAPORE) Temasek Holdings is looking to sell its majority stake in troubled Pakistan lender NIB Bank, just months after it injected over $100 million into the bank.A source told BT that Temasek was looking to offload its 88.6 per cent stake in NIB, which recently saw its founding president and chief executive replaced.
The bank has suffered a cumulative net loss of some 17 billion Pakistan rupees (S$243 million at current exchange rates) since Temasek first invested in the bank in early 2005, according to BT's calculations.
The Industrial and Commercial Bank of China has shown interest in buying Temasek's stake in NIB, Pakistan newspaper The Express Tribune reported on Tuesday, citing banking sources.
'We don't comment on market speculation,' a Temasek spokesman said in response to questions from BT.
Temasek owns some 9.13 billion shares, or an 88.6 per cent stake, in NIB through its wholly owned, indirect subsidiary Bugis Investments (Mauritius), according to NIB's latest financial statement.
Yesterday, NIB shares were trading at 1.49 rupees each, valuing Temasek's stake at 13.61 billion rupees, or about $194 million. That's far short of the estimated $560 million that Temasek has paid to accumulate the stake, BT's analysis of NIB's and Temasek's financial statements shows.
Temasek bought a 25 per cent stake in NIB in February 2005, then quickly raised it to 73 per cent in July 2005. It paid a total of US$57 million to acquire that majority stake, its first direct investment in Pakistan, according to Temasek's 2005 annual report.
Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.
