The Swiss government said it plans to sell its 6 billion-franc investment in UBS, the country’s biggest bank, after signing an agreement with the U.S. yesterday over data on bank clients suspected of evading taxes, reported Bloomberg. The government gave a mandate to three Swiss and foreign banks to sell 332.2 million UBS shares, securing a certain minimum price, Peter Siegenthaler, director of the federal finance administration, said. He declined to identify the banks or the minimum price, saying the state expects to make a “significant profit.” The Swiss Confederation will waive its right to receive future coupons on the mandatory convertible notes for a cash amount of approximately 1.8 billion Swiss francs, representing the present value of the future coupon payments, UBS said. Switzerland’s government last year invested 6 billion Swiss francs ($5.6 billion) in mandatory convertible notes to help Zurich-based UBS split off toxic assets. The recent settlement of a U.S. lawsuit that sought data on as many as 52,000 UBS clients and the bank’s 3.8 billion-franc capital increase in June has strengthened confidence in the bank, the government said. Swiss and U.S. authorities said earlier yesterday that UBS will divulge information on 4,450 accounts to settle a U.S. lawsuit that sought names of American clients suspected of evading taxes. The bank, which won’t pay any fine under the agreement, will transfer the data to the Swiss government, which will then decide what information gets passed on. The government intends to convert the mandatory convertible notes on Aug. 25, when UBS will also make the cash payment in lieu of future coupons.
Switzerland to Sell $5.6 Billion UBS Stake After U.S. Tax Deal
The government gave a mandate to three Swiss and foreign banks to sell 332.2 million UBS shares, securing a certain minimum price.
August 20, 2009