By Sebastian Tong -
SINGAPORE, Oct 14 (Reuters) - Singapore state investment fund Temasek Holdings Pte Ltd. is expected to buy stakes in a Chinese bank and Indonesia's largest listed oil group as it shakes up its $54 billion portfolio to reduce exposure to its home market.
Temasek [TEM.UL], which announced this week it intends to trim its assets in Singapore to one-third of the total in the next decade, said on Thursday it was the preferred bidder for 38.4 percent of Indonesian petroleum producer Medco.
The stake in Medco Energi Internasional Tbk , worth about $289 million, would also give the powerful state agency a share of Australia's Novus Petroleum Ltd., a Medco unit operating in Asia, the Middle East, United States and Australia.
Temasek also emerged as a possible investor in China's second most valuable listed lender, Minsheng Bank , Chinese officials said on Thursday, ahead of plans by China's first private bank for a $1 billion overseas share sale early in 2005.
A Minsheng shareholder, China National Coal Group, confirmed talks to sell 4.7 percent of Minsheng to Temasek. That investment would be worth about $68 million, excluding premiums Temasek may pay.
Temasek is under pressure to scale back its local underperforming assets and expand aggressively overseas after its first annual report in 30 years, released on Tuesday, showed its annual returns had shrunk to 3 percent in the last decade.
That was down from 18 percent over the past three decades. Currently, about 52 percent of its holdings are in Singapore, where it controls most of the island's biggest companies.
Minsheng would be Temasek's second major investment in China in a month after it bought 9.1 percent of China Power International Development Ltd. , a unit of China's largest power generating group run by former Chinese Premier Li Peng's daughter.
FOCUS ON ASIAN IPOS
The Chinese and Indonesian deals reflect plans by Temasek to expand its portfolio of listed and unlisted offshore investments that span Australia, India, Indonesia, South Korea, Malaysia and the United States. Its total portfolio is valued at S$90 billion.
Temasek announced on Wednesday it was shuttering 100 percent-owned conglomerate Singapore Technologies, which holds stakes in a crop of listed firms, underlining the restructuring of its local holdings.
Temasek has adopted an aggressive acquisition strategy since the appointment in 2002 of Executive Director Ho Ching, the wife of Singapore Prime Minister Lee Hsien Loong, snapping up S$3.3 billion in two years.
A European investment banker said Temasek is displaying an appetite for Chinese and other Asian offerings and placements.
"I am not surprised by their interest in Minsheng Bank ahead of their IPO. Most banks doing share placements or pre-IPO marketing have had good orders from Temasek," he said. "They are good investors, long-term holders and not just looking to flip the shares."
He noted that Temasek had picked up 3 percent of Qantas Airways in a recent placement by British Airways Plc and also bought a stake in the placement of Woori Bank, a unit of South Korea's Woori Financial Group .
A Temasek official told Reuters the agency was in talks with Thailand's PTT Exploration and Production PCL (PTTEP), for the stake in Medco, which aims to boost its production assets in its home market as crude prices surge.
"Our wholly-owned company Everitt Investments has been named the preferred bidder for the acquisition of a 44.9 percent stake in a company called New Links Energy Resources Ltd. which has an 85.5 percent stake in Medco," said the Temasek official.
A stake in New Links, which owns 85.5 percent of Medco, would give Temasek 38.4 percent of Medco. PTTEP controls 40 percent of New Links Energy Resources. (Additional reporting by Scott Hillis and Godwin Chellam in China, Lily Kurniawati in Jakarta and Doreen Siow in Singapore).
Source: Yahoo News Singapore
