Brazil's BTG sells $870.8 million hospital stake to GIC

BRASILIA (REUTERS) - Investment bank Grupo BTG Pactual will sell a stake in Brazil's largest hospital chain, Rede D'Or Sao Luiz SA, to Singapore sovereign wealth fund GIC Pte Ltd for about 2.38 billion reais (S$870.8 million), the bank said on Wednesday.

The operation will be subject to antitrust regulatory approval, BTG Pactual said in a statement. It did not specify the size of the stake being sold, but sources with direct knowledge of the deal had told Reuters on Sunday it would be around 12 percent of the hospital chain.

The move comes as Latin Americas largest independent investment bank strives to shore up its cash levels following the arrest on Nov. 25 of its founder and largest shareholder, André Esteves.

Executives at the São Paulo-based bank had been negotiating exiting Rede D'Or since August but Esteves' detention sped up talks.

In a setback to management's efforts to restore confidence, Moody's Investors Services stripped BTG Pactual of its investment-grade rating on Tuesday, cutting it two notches to BA2 from BAA3, because of the challenges in maintaining its liquidity following Esteves' arrest. The bank's bonds had slumped during trading hours.

Esteves was arrested as part of "Operation Car Wash," a probe into links between ruling coalition politicians and company executives who allegedly traded contracts at state firms for bribes and campaign donations.

The high-flying financier, who remains in jail, quit his executive duties on Sunday. Through his lawyers, he has denied the allegations.

BTG Pactual's newly appointed co-chief executives Roberto Saloutti and Marcelo Kalim aim to raise another 4 billion reais from a planned sale of loans to larger Brazilian rivals Itau and Bradesco, sources told Reuters this week.

GIC paid 3.3 billion reais for a 16 per cent stake of Rede D'Or in May. The other partners in Rede D'Or are Brazil's Moll family, which founded Rede D'Or in 1977, and Carlyle Group LP.