Singapore state investor Temasek Holdings [TEM.UL] is selling its entire 9.6% stake worth up to $643 million ($841 million) in South Korea’s Hana Financial Group Inc <086790.KS>, a term sheet obtained by Reuters showed on Wednesday.

Both Hana and Temasek had no immediate comment on the proposed sale, but the deal comes as Temasek had agreed to support a US$5.3 billion rights offering by Standard Chartered <STAN.L>. 

 

The deal could also mark a setback for Hana as South Korea’s fifth-biggest financial firm by market value tries to gather shareholder support for its move to merge with bigger Woori Finance Holdings <053000.KS> to challenge larger banks.

 

Angelica Investments, wholly owned by Temasek Holdings, is selling 20.4 million Hana shares at 34,300 won ($39.7) to 35,550 won ($41.1) — a discount of zero to 3.5% to Wednesday’s closing price of 35,550 won, the term sheet showed.

 

The investment vehicle became a top shareholder of Hana in 2005 when the South Korean firm launched a financial holding company. Hana’s share price has dropped nearly by a quarter since Angelica bought its shares in early December 2005.

 

Of Temasek’s portfolio, 37% of its holdings were in the financial sector as of the last financial year that ended March 2010. It owns about 18% stake in Standard Chartered and has been lately investing in energy and resources companies to diversify its US$134 billion portfolio.

 

Credit Suisse is handling the placement.