DBS has decided not to participate in the proposed US$1 billion recapitalisation of Thailand's TMB Bank. The decision comes after several months of extensive discussions with Thailand's Ministry of Finance as well as the board and management of TMB.
In a statement out on Friday, the Singapore lender said it did not receive adequate assurance that it would have sufficient management control to effect the business and operational changes necessary to improve TMB's performance.
TMB is planning a rights issue as part of efforts to raise 35 billion baht or S$1.6 billion.
Discussions were held for DBS to participate in the rights issue and raise its shareholding to 20 percent.
But the Singapore lender was reported to be disappointed with TMB's performance.
TMB will be talking with other potential investors to complete its recapitalisation by the end of 2007.
DBS said it expects its stake to be diluted, but it remains committed as a significant shareholder of TMB. - CNA/ms
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