UPDATE 2-Singapore's Temasek invests $900 mln more in Merrill

martes 29 de julio de 2008 08:30 CEST

(Updates with analysts' comments, details, Korean sovereign wealth fund comments)

By Kevin Lim and Saeed Azhar

SINGAPORE, July 29 (Reuters) - Singapore sovereign wealth fund Temasek Holdings [TEM.UL] will pump an additional $900 million into Merrill Lynch MER.N as part of the debt-laden U.S. investment bank's latest $8.5 billion fund-raising effort.

Temasek said on Tuesday that Merrill will give it a rebate of $2.5 billion on its original $4.4 billion stock purchase following the U.S. firm's decision to sell new shares.

Temasek will plough that money, plus another $900 million, back into new Merrill stock, potentially increasing the state-run fund's stake in one of the best-known U.S. banks to more than 10 percent.

The fund had been facing huge paper losses on its initial investment in Merrill at $48 per share as banking stocks slid this year amid writedowns on risky debt.

The rebate, announced less than two weeks after Merrill posted a $4.9 billion second-quarter loss, effectively reduces the cost of Temasek's existing shares in the U.S. bank by more than half to $21 a share, according to Reuters calculations.

Neither Merrill nor Temasek disclosed the price at which the new Merrill shares would be offered.

Merrill shares fell 11.6 percent on Monday to $24.33. After the market close, the company said it will take a further $5.7 billion in debt-related writedowns in the third-quarter and raise $8.5 billion by selling new stock.   Continuación...