TPG to sell its 37% stake in BankThai

US private equity firm TPG will sell its stake to Malaysian bank CIMB, which two weeks ago purchased 42 percent of BankThai.

TPG will sell its 37 percent stake in BankThai to Malaysian bank CIMB Group, at a cost of BHT2.10 ($0.60; €0.40) per share.

The move comes two weeks after CIMB purchased a 42 percent stake in the bank, from the Bank of Thailand’s Financial Institution Development Fund. The transaction took place on 5 November at the same price of BHT2.10 per share.                                                                                       

TPG bought 500 million shares in ThaiBank for $186 million in 2007. It agreed to buy additional shares later that year as part of a recapitalisation process, following losses from its investment in the US subprime securities. TPG’s share margin increased from 24.99 percent to nearly 37 percent.

In a statement TPG said it believes Thai Bank will best realise its prospects by having one controlling, strategic shareholder.

In a separate transaction on 3 November, TPG agreed to invest US$150 million in Bumiputra-Commerce, the listed vehicle of CIMB Group, by subscribing to bond-warrants in a private offering. The two-year senior unsecured bonds will yield an annual coupon of 3 percent.

Under the agreement TPG will receive approximately 50 million warrants to purchase ordinary shares of Bumiputra-Commerce at a price of RM10 per share. Bumiputra-Commerce will only issue the bonds and warrants after the tender offer for BankThai shares closes on 6 January 2009.