GIC gives UBS share sale a miss

(SINGAPORE) The Swiss government has sold its entire 9.3 per cent stake in UBS for a tidy profit, less than a year after it poured six billion Swiss francs (S$8.15 billion) into the country's biggest bank.

The Government of Singapore Investment Corporation (GIC) said it did not buy any of the UBS shares sold by the Swiss government, but added that it remains confident of the long-term prospects of its earlier investment.

The Swiss government sold all 332.2 million UBS shares it controls to institutional investors for 16.50 francs each, or a total of some 5.48 billion francs, yesterday, the Swiss Federal Department of Finance said in a statement in German on its website.

The government will receive another 1.8 billion francs in cash from UBS as payment for waiving its right to future coupon payments on the mandatory convertible notes through which it held its investment in the bank.

Such notes earn interest like debt, but must be exchanged for ordinary shares by a fixed maturity date. The notes held by the Swiss government paid interest of 12.5 per cent a year, and were due to mature in June 2011.

In total, the government will receive 7.2 billion francs, or a profit of 1.2 billion francs on the sale of its six billion franc investment in UBS, it said.