LONDON • Standard Chartered plc’s (StanChar t) loss-making private equity unit is planning an investment in a Singaporean crane firm, signalling it’s still open to deals even as the business shrinks.
Standard Chartered Private Equity, or SCPE, has proposed to buy shares of publicly listed Tat Hong Holdings Ltd, the Singapore-based company said last Friday in a filing to the local stock exchange. The London- based bank’s buyout unit has offered to pay 50 Singapore cents (RM1.54) a share, subject to conditions, Tat Hong said in the statement, without specifying the number of shares involved. That’s 28% higher than the year-to-date average price of the firm, which has a market value of S$347 million.
The potential investment shows StanChart is still trying to make money from the highrisk, high-return business of private equity, even after CEO Bill Winters moved to wind down the SCPE unit last year.
The division has lost more than US$1 billion (RM4.19 billion) since 2015 as deals went awry across emerging markets, hampering the CEO’s efforts to overhaul the bank.
Last Friday, Tat Hong requested a trading halt in its shares on the Singapore exchange. SCPE’s proposal is subject to conditions including an agreement of terms on a definitive partnership and binding debt financing, and final approval by its investment committee, Tat Hong said in a statement.
Tat Hong isn’t involved in the discussions relating to the definitive partnership terms, it said last Friday.
Executives at SCPE decided late last month to move ahead with the proposal known as Project Titan, people familiar with the discussions said. Tat Hong’s current controlling shareholders, Chwee Cheng & Sons Pte Ltd and related parties, who own more than half of the company, would boost their stake to 71% while SCPE would get a 29%, the people said, declining to be identified as the talks are private.
Tat Hong has struggled with a decline in economic growth in China and a slump in commodity prices, reports show. The company’s revenue has tumbled and the company has posted S$77 million of combined losses for the past two financial years, according to the reports. The shares are down about 66% since 2013.
SCPE executives have had rough years of their own after spending billions of dollars of StanChart funds on stakes in high-risk companies across the Middle East, Africa and Asia that then lost value. Winters ousted the head of the business, Joe Stevens, late last year and the bank announced that it would begin exiting its investments.