Citigroup to divest energy-trading unit Phibro: reports
07 Oct 2009
Financial major Citigroup is planning to divest its energy-trading unit Phibro, following the heavy flak it received for the huge pay package of $100 million to its star trader Andrew Hall, according to a media report.
According to the Financial Times, the bank was working on a sale of its controversial commodities unit, a move that could raise hundreds of millions of dollars and at the same time deflect anger over a potential $100-million payout for its star trader Andrew Hall.
According to the report, which cited knowledgeable sources, the decision had been arrived at after considering various options including divesting part of the unit, opening it up to outside investors or spinning it off.
In case the deal did not materialse, the financial major would sell a majority stake in Phibro even as it retained a minority interest for a few years, according the report.
Quoting insiders, the daily said talks would likely fail as Citi had, in the past, held talks with potential buyers but a deal could not be clinched.
According to the report Citi had had ben in contact with several investors having interests in commodity trading including Warren Buffet, to gauge their interest in Phibro over the past few months.
On Tuesday, Citi said it was evaluating the best way forward for all stakeholders and was exploring several options.
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