New York (AP) — Temasek Holdings Ltd., a government-controlled Singapore investment company said in a regulatory filing Thursday it currently holds a 9.4 percent stake in investment bank Merrill Lynch & Co.
On Dec. 24, Merrill Lynch said it would sell a 9.9-percent stake in itself to Temasek for $4.4 billion, and give Temasek the option to purchase an additional $600 million in stock by March 28.
Temasek's acquisition came as Merrill Lynch said it would sell $1.2 billion in stock to private equity firm Davis Selected Advisors.
Merrill Lynch sought new capital to boost its cash reserves. During the third quarter, Merrill Lynch took an $8.4 billion writedown on the value of bonds and debt backed by mortgages leading the company to its worst-ever quarterly loss. As mortgages increasingly defaulted during the second half of 2007, banks were forced to lower the value of debt backed by the troubled loans. Analysts widely expect Merrill Lynch to report additional writedowns in the fourth quarter.
Temasek currently owns about 91.7 million shares of Merrill Lynch, according to the filing with the Securities and Exchange Commission.