Financial major Citigroup is planning to sell its energy-trading unit Phibro, which came under flak for the huge pay package of USD 100 million handed over to its star trader Andrew Hall, says a media report.
“Citigroup is working on a sale of its controversial commodities unit in a move that could raise hundreds of millions of dollars and deflect political anger over a potential USD 100 million payout for its star trader Andrew Hall,” British daily the ?Financial Times? said.
Attributing to people close to the situation the report said, after weighing several options such as divesting part of the unit, opening it up to outside investors or spinning it off, Citi’s executives favoured a complete divestment of the commodity trading division.
In case the deal fails to materialise, Citi would sell a majority stake in Phibro while retaining a minority interest for a few years, the report noted.
Quoting insiders the daily said, the talks for a possible sale is likely to collapse, as Citi had earlier also held talks with potential buyers but the deal did not materialise.
“Citi has had contacts with a number of investors with commodity trading interests, including Warren Buffett, to gauge their interest in Phibro over the past few months. Talks with the billionaire investor have cooled,” the report said citing bankers.