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Government sells stake in UBS

The Swiss government has announced it is selling its stake in big bank UBS after concluding a deal in the United States to end a year-long tax-evasion dispute.

The announcement came after the close of the US stock exchange on Wednesday, and after details of the deal had been made known earlier in the day.

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.

UBS shares closed at SFr16.74 ($15.70) on the Zurich stock exchange, valuing the government stake at around SFr5.56 billion ($5.22 billion).

The government said on Wednesday it had agreed to process a request by the United States for details of 4,450 US UBS accounts suspected of hiding assets. In return, Washington agreed to drop a civil case against the Swiss bank seeking the handover of some 52,000 client names.

The sale also requires UBS to pay the government SFr1.8 billion in interest that would have been due when the notes mature in 2011.

The government said the sale would more than recoup its SFr6 billion investment in the bank last October – part of a rescue package for the country’s former top bank, which was hard hit by the US subprime mortgage crisis and the ensuing global economic downturn.

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