Singapore GIC Prepared to Adjust UBS Terms: FT


The Government of Singapore Investment Corp (GIC) is prepared to adjust the terms of its deal to buy 9 percent of UBS to help the Swiss bank win shareholder approval, its deputy chairman was quoted as saying on Monday.

UBS , Europe's hardest-hit bank from the credit crisis, received a lifeline of 13 billion Swiss Francs ($11.94 billion) from GIC and an undisclosed Middle East investor in December to shore up capital hurt by hefty subprime housing losses.

Under the deal, UBS will pay GIC -- which will invest 11 billion Swiss Francs -- and the Middle East investor a coupon of 9 percent on securities that can be converted into shares within approximately two years of the issue of the notes.

However, the terms of the deal have drawn ire from some smaller shareholders who said it is unfair that they cannot participate in the mandatory convertible bond, with some calling for a rejection of the investment from GIC and the Middle East investor.

"We would be prepared to adjust the terms," Tan said, according to the transcript of his interview with the Financial Times in Davos. "We would be prepared to see how we could help them. But we have signed an agreement with them so that has to be honoured."

UBS has scheduled an Extraordinary General Meeting for February 27, when it will seek approval for the investment.

Tan also said that greater scrutiny of sovereign wealth funds will force the GIC, which manages over $100 billion, to become more transparent and follow a code of conduct for sovereign funds, although he said this should be flexible and voluntary.

"We will disclose more," he was quoted as saying. "As to what we would disclose, that remains for further discussion. It's up to the government."