Swiss govt to sell stake in UBS

Bern, Switzerland - The Swiss government is selling its stake in UBS AG after concluding a deal that appears to end the bank's yearlong tax-evasion probe in the United States.

A consortium of banks has been asked to place the government's 332.2 million mandatory convertible notes with institutional investors. The sale should be completed on Thursday, the government said.

The move came hours after the government announced it had signed an agreement with the United States under which UBS will disclose the names of 4 450 American clients suspected of hiding assets in Swiss accounts. In return, Washington agreed to drop a civil case against the Swiss bank seeking the handover of some 52 000 client names.

UBS shares closed at 16.74 Swiss francs ($15.70) on the Zurich exchange on Wednesday, valuing the government stake at around 5.56bn francs ($5.22bn).

The sale also requires UBS to pay the government 1.8bn francs in interest that would have been due when the notes mature in 2011.

The government said the sale would more than recoup its 6bn-franc investment in the bank last October - part of a $42bn rescue package for the former financial powerhouse hard hit by the US subprime mortgage crisis and the ensuing global economic downturn.

- AP