BTG Sells Stake in Rede D'Or to Singapore's GIC for $618 Million

Grupo BTG Pactual sold a stake in Brazil’s biggest hospital chain for 2.38 billion reais ($617.7 million) as it pushes to shore up its cash holdings after the arrest of its controlling holder and former Chief Executive Officer Andre Esteves.

BTG sold shares of Rede D’Or Sao Luiz SA to Singaporean sovereign-wealth fund GIC Pte, it said in a regulatory filing on Wednesday. The deal is still subject to approval from Brazil’s antitrust regulator.

People familiar with the matter said last week the bank was trying to sell its remaining stake in Rede D’Or. BTG bought 25.6 percent of Sao Paulo-based Rede D’Or in 2010 for about 600 million reais, a person familiar with the matter said earlier this year. In May, BTG Pactual sold half of its holding in Rede D’Or to GIC for 1.6 billion reais, according to the bank. In August, BTG Pactual was in talks to sell a small stake to Carlyle, the Washington-based private-equity firm, people familiar said at the time.

Banco BTG Pactual, the group’s main operating subsidiary, had its credit grade cut to junk by Moody’s Investors Service on Tuesday amid concern the investment bank will struggle to keep enough cash on hand and maintain its franchise. Esteves, who was jailed on Nov. 25 for allegedly trying to interfere with the testimony of a former Petroleo Brasileiro SA executive, resigned his posts on Sunday as his arrest was extended indefinitely, and has denied wrongdoing through attorneys. BTG said it is not being investigated and is cooperating with authorities.

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