U.S. News

Thursday, August 20, 2009

Swiss govt to sell stake

Switzerland is selling its nine-per cent stake in UBS, the federal government said on Wednesday, soon after the bank reached a deal with Washington over its tax fraud investigation.

'The Federal Council (government) has decided to immediately and completely end its commitment' to UBS, a finance ministry statement said.

The government had instructed a consortium to place its 332.2 million UBS shares on the market, said the statement.

It had also agreed to a cash sale to UBS of the remaining coupons of its mandatory debt conversion, thus allowing Bern to get back all of its initial investment in the bank and make 'an adequate profit,' the statement added.

The news came hours after Switzerland and the United States reached a deal under which UBS would disclose details of 4,450 accounts to US authorities as part of a settlement of potentially damaging tax fraud charges against the bank.

That settlement would 'significantly contribute to sustaining and reinforcing confidence in the bank, which will thus be better able to pursue its reorganisation and restructuring,' said the ministry statement.

A statement from the Swiss National Bank (SNB) welcomed the news.

'The placement of the shares resulting from the conversion of the Confederation's mandatory convertible notes is an indication of the market's confidence that the bank's resilience has improved further,' it said.

'With this sale, the Swiss government will no longer have a stake in UBS.' -- AFP