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3 sets of investors eye Islamic Bank of Thailand stake sale

Three sets of investors, one of which is local, have shown interest in acquiring a substantial stake in the state-run Islamic Bank of Thailand, Bangkok Post reported Oct. 9, citing Piyawan Lamkitcha, deputy director of Thailand's State Enterprise Policy Office.

The bank will present its rehabilitation plan to the State Enterprises Policy Commission Oct. 11, which is expected to shed more light on the situation.

The struggling bank previously planned to sell a 74.5% stake to investors, after which the government will inject 18 billion Thai baht of fresh funds into the bank to help it meet capital adequacy ratio requirements. In May, it was reported the lender was in danger of closure by June if it failed to find a majority buyer.

In August, Prime Minister Prayut Chan-o-cha directed Islamic Bank to finish its long-delayed process of finding a new investor by end-2017, noted Bangkok Post. Thailand's Finance Ministry holds a 48.5% stake in the bank, while Government Savings Bank owns 39.8% and Krungthai Bank PCL owns 9.83%. The rest are owned by other shareholders.

Vitai Ratanakorn, the lender's director and acting president, said in the latest report the finance ministry's plan to inject 18 billion baht will not be enough to meet CAR benchmarks due to the re-emergence of some nonperforming loans.

As of Oct. 6, US$1 was equivalent to 33.42 Thai baht.