GE considering future of its 33 pc stake in Bank of Ayudhya: sources

General Electric has hired Morgan Stanley to review its 33 per cent stake in Thailand’s Bank of Ayudhya, which could potentially lead to a sale by the US conglomerate of its near US$2.2 billion holding, sources familiar with the matter said.

The stake sale has been a constant source of media speculation since GE started to shrink its businesses. This is the first time the company has formally given a mandate for a review, underscoring the seriousness with which it wants to explore its options.

GE acquired the Bank of Ayudhya stake in 2007, investing 22.3 billion baht, or US$626 million based on the then exchange rate, in Thailand’s No. 5 lender.

It was unclear when GE would launch a formal auction, if at all, sources said, declining to be identified as the discussions were confidential. Morgan Stanley was unavailable for comment, while GE did not reply to an e-mail seeking comment.

GE, which has a market capitalisation of US$233 billion, has been selling non-core businesses under chief executive Jeff Immelt, and the review of the Thai bank stake is part of the overall restructuring, the sources said.

The US conglomerate initially acquired a 25 per cent stake in the Bank of Ayudhya for 16.00 baht a share in 2007 and subsequently raised the stake to nearly 33 per cent. With the Bank of Ayudhya shares trading at 35.25 baht, GE has more than doubled the value of its investment.