Merrill looking for lifesaver

31 December 2007

It seems that the help troubled Merrill Lynch has already received has not been enough, as the bank submits to China and the Middle East with requests for money.

Going cap in hand to the sovereign wealth funds for China and the Middle East, analysts suggest that the bank may be in more trouble than they at first feared.

This news means that the US banking giant is likely to sell another big stake, only shortly after it sold off shares to save itself.

According to the Observer, Merrill is following up its announcement last week of its efforts to save itself by selling $6.2 billion worth of shares to Temasek and Davis Selected Advisers.

A US analyst told the newspaper: "The multi-billion cash injection from Temasek was not enough and Thain is taking calls from a host of other potential saviors, which are understood to include sovereign fund investors from the Gulf and China."

He said of the new chief executive: "Thain is desperately seeking an additional infusion of foreign capital to bolster Merrill’s balance sheet. It could be done by selling shares or other assets to raise cash."

A fourth-quarter loss is widely predicted for Merrill Lynch, which saw a $8.4 billion write-down in the third quarter.

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