DBS decides against taking up Thai bank's rights offer

Dec 25, 2007, 1:17 GMT

Singapore - DBS Group Holdings has decided against taking up any shares in a Thai bank's capital-raising exercise, news reports said Tuesday.

DBS' decision not to subscribe to its share of the offer is consistent with its intention to reduce its participation in the strategic direction of TMB, given the change in TMB's 'post- recapitalization shareholding structure,' said the bank's statement published in The Straits Times.

Its existing stake in the loss-making Thai bank will fall from 16 per cent to about 6.8 per cent, should other shareholders subscribe fully to the fund-raising offer, said DBS, the city-state's largest bank.

Thailand is an 'important market' for DBS in Asia, the statement said. 'DBS will continue to work with the Ministry of Finance and the Bank of Thailand as it assesses its options in the bank.'

Facing shrinking earnings and loans growth, Thailand's sixth- largest lender said in October that it would raise money in a 'recapitalization exercise.'

DBS, with Deutsche Bank as its partner, made a 618-million-US- dollar stake bid for TMB shares last month. It was rejected by TMB in favour of ING Group's 675-million-US-dollar offer, paving the way for the Dutch financial group to acquire a 30-per-cent stake in the Thai lender.

Thailand's finance ministry is TMB's biggest shareholder.