The RAC’s owner has scrapped plans to float the breakdown service on the stock market and has instead sold a stake to Singapore’s sovereign wealth fund.

The RAC was expected to join its rival, the AA, in listing on the stock market, joining this year’s flood of initial public offerings (IPOs). But Carlyle Group, the US buyout firm that bought RAC in 2011 for £1bn, said it had decided against a flotation and that Singapore’s GIC would take a stake in the business.

The group also scrapped a plan to bring in Sir Mike Rake as chairman to guide the group through a float. The current chairman, Rob Templeman, will now stay on.

The deal, scheduled to complete by the end of this year, will leave Carlyle and GIC jointly owning the majority of RAC, with equal stakes, with RAC management holding the remaining shares.

GIC, formerly the Government of Singapore Investment Corporation, is estimated to be worth $300bn (£183bn).

“This transaction completes the strategic review undertaken by Carlyle and as a result, RAC will not be pursuing an IPO at this time,” Carlyle said.

Carlyle said it had invested more than £40m in RAC, improving computer systems, increasing brand awareness and establishing a sales database.

Andrew Burgess, a partner at Carlyle, said: “GIC is a high-calibre, long-term investor that shares Carlyle’s vision for RAC. Both Carlyle and GIC believe that RAC has a clear strategy with significant growth potential, which its talented and experienced management team will continue to deliver.”

RAC is the modern incarnation of the Royal Automobile Club, an association founded in 1897. It has about 8 million members.