StanChart starts sale process for PE unit

By BLOOMBERG

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

Earlier this month, the bank sent so-called teaser documents on Standard Chartered Private Equity (SCPE) 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 US$3.5 billion (RM13.69 billion) in assets, is expected to be distributed to interested parties in the next few weeks, one of the people said.

The PE 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 StanChart 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 StanChart declined to comment.

SCPE’s investments range from a chain of shopping malls in Botswana to a Vietnamese play-centre operator.

About one third of the assets managed by SCPE belong to the bank, with the remainder owned by other investors.

StanChart incurred restructuring charges of US$353 million last year primarily related to its exit of the principal finance business, which houses the PE unit, as well as redundancy costs. SCPE’s total losses since 2015 amounted to about US$1 billion, one of the people said.