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GE committed as shareholder of Bank Ayudhya


October 3, 2008

Thailand: GE committed as shareholder of Bank Ayudhya

Thailand's Bank of Ayudhya (BAY) said on Thursday that General Electric, which has a 33 percent stake in it, was strongly committed to the bank, dismissing rumours of a possible divestment, reported Reuters.

Worries about the US conglomerate's financial arm helped send BAY shares down as much as 5.8 percent to 14.50 baht, the lowest since December 2005, but they recouped some losses to end down 2.6 percent at 15 baht. The main index rose 0.55 percent.

"Everything is the same. GE still intends to remain invested in BAY," Yaowalak Poolthong, BAY's head of corporate communications, told Reuters.

Investors are cautious about deteriorating profits at its GE Capital finance arm, but GE plans to raise $15 billion through stock sales -- including $3 billion to Warren Buffett -- to improve liquidity and give it the option to make more acquisitions.

BAY stock, extending a three-day falling streak, was also hurt by expectations of weaker third-quarter net profits due to further impairment losses against its $85 million investment in collateralised debt obligations (CDOs).

"The company's new GE Money-appointed management team that came in early 2007 appears to be making progress in addressing the bank's historical problems," Citigroup Global Markets said in a research note.

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