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Abu Dhabi, UAEMonday 10 December 2018

Standard Chartered kicks off sale process of loss-making private equity unit

The UK banks is gauging interest from potential suitors, including other buyout firms in Asia

Standard Chartered is kicking off sale process for its loss-making private equity unit. Bobby Yip / Reuters.
Standard Chartered is kicking off sale process for its loss-making private equity unit. Bobby Yip / Reuters.

Standard Chartered, the UK bank with operations across Asia and Africa, is kicking off a sale process for its loss-making private equity unit, according to people with knowledge of the matter.

Earlier this month, the bank sent so-called teaser documents on Standard Chartered Private Equity to gauge interest from potential suitors, including other buyout firms in Asia, said the people, who asked not to be identified because the process is private. More detailed information about the unit, which manages about $3.5 billion in assets, is expected to be distributed to interested parties in the next few weeks, one of the people said.

The private equity unit was initially profitable but its fortunes started to turn in late 2015, partly because of the plunge in the price of oil. Former SCPE head Joseph Stevens left the bank in 2016 after failing to conclude a buyout deal, and Standard Chartered decided to seek an exit from most of the business by 2018.

There is a possibility that current management of SCPE, headed by Nainesh Jaisingh, will partner with other companies to buy the assets, said the people.

A London-based representative for Standard Chartered declined to comment. Shares of the lender fell 0.3 percent Wednesday in London to 747.1 pence, the lowest in more than three months.

SCPE’s investments range from a Jordanian chicken company and a chain of shopping malls in Botswana to a Vietnamese play-center operator and an Australian cattle firm. More recently, it proposed to buy shares of a Singapore crane firm. About one third of the assets managed by SCPE belong to the bank, with the remainder owned by other investors.

Standard Chartered incurred restructuring charges of $353 million last year primarily related to its exit of the principal finance business, which houses the private equity unit, as well as redundancy costs, the bank said in its 2017 annual report. SCPE’s total losses since 2015 amounted to about $1 billion, one of the people said.

--With assistance from Stephen Morris

To contact the reporters on this story: Chanyaporn Chanjaroen in Singapore at cchanjaroen@bloomberg.net, Joyce Koh in Singapore at jkoh38@bloomberg.net.

To contact the editors responsible for this story: Ben Scent at bscent@bloomberg.net, Marcus Wright, Timothy Sifert

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