MFS to sell stake in Stella business to CVC-paper

SYDNEY, Feb 4 (Reuters) - Australian financial services firm MFS Ltd MFS.AX will announce as early as Monday the sale of a stake in its Stella tourism business to private equity firm CVC Asia Pacific, the Australian Financial Review newspaper reported.

Without citing sources, the paper said MFS will sell a majority stake in a deal that values the whole of Stella at about A$1.6 billion ($1.5 billion), or some 40 percent less than the value of Stella about two months ago.

MFS, a casualty of the global credit crunch, is restructuring after a A$1.3 billion deal to sell its funds management business collapsed, and as investors bailed out of its stock on concern about its viability following a surprise fund raising announcement.

Trading in its shares has been suspended indefinitely as it struggles to recapitalise and repay short-term debt. Its shares dived by 70 percent on Jan. 18 after the fund raising announcement.

It said last week a subsidiary will sell an aged care business to help raise cash. ($1=A$1.10) (Reporting by Jonathan Standing)