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Tuesday, August 1, 2000

Trust earns
$1.1 billion in
Goldman sale

The Kamehameha Schools
plans to invest much of the
proceeds in bonds and other
fixed-income instruments

Staff and wire reports

The Kamehameha Schools today earned about $1.1 billion from its sale of 11 million shares of Goldman Sachs Group Inc.

The $6 billion charitable trust sold half of its shares in Goldman Sachs as part of a 40 million-share offering by the Wall Street investment banking firm.

The shares were offered after the market closed at $99.75, $1 below today's closing price of $100.75 on the New York Stock Exchange.

The windfall is in addition to the $477 million that the Kamehameha Schools earned from the May 1999 initial public offering of Goldman Sachs.

The Kamehameha Schools, which was established in 1884 to educate native Hawaiian children, originally invested $500 million in Goldman starting in 1992 and still owns about 11 million shares in Goldman Sachs after today's sale.

Much of the proceeds from today's sale will be reinvested in bonds and other fixed-income investments, in a move to further diversify the estate's holdings, said trust spokesman Kekoa Paulsen.

"The concern has been that we're overweighted in that investment," Paulsen said. "This will bring additional balance and diversity to the portfolio."

Over the long haul, income generated from the Goldman Sachs deal will help finance the trust's ambitious expansion of its educational programs.

Today's total offering of 40 million Goldman Sachs shares raised about $4 billion. It was the biggest share offering by a U.S. financial company, underscoring the firm's leading role in Wall Street's most lucrative businesses, such as stock underwriting, merger advisory, and junk bonds.

In addition to the Kamehameha Schools, Japan's Sumitomo Bank sold 12.6 million shares in today's offering while Goldman's current partners and retired partners sold 16.4 million shares.

If there is enough demand, Goldman will exercise the so-called green shoe, enabling current partners to sell 6 million more shares.

Today's offering was done after the stock market closed.

Star-Bulletin reporter Rick Daysog and
Bloomberg News contributed to this report

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