The deal will provide Citi with about $616 million of equity and is part of its strategy of selling non-core assets in an effort to retain the minimum tier 1 capital requirements.
Citi holds 24% of Redecard, with Banco Itaú and Unibanco, two leading Brazilian banks, holding a further 23.2% each. The three banks are reported to be selling about 15% of their shares through a $1.7 billion listing, with Citi reducing its holding share by 7% to 17%.
In July 2007, Redecard came to the market with an IPO on Bovespa, the Brazilian stock exchange. Despite the R$4 billion ($2.2 billion) deal being a relative success, Redecard stock did not fare well in the last six weeks of 2007 and beginning of 2008 the price dropped off from a high of R$38 at the start of November to R$24.21 five days after the follow-on was announced. Despite this drop in market value, Citi is still keen to push through the sale. In addition to Redecards announcement, Citi has also sold Simplex Investment Advisors, a real estate investment advisory firm in Japan.
You do not currently have access to this content. To gain access visit the subscription page or call our hotline on +44 (0)207 779 8999.
Are you already registered? If so, please enter your username and password here to continue.
Know your email address?
Click here for your password.
Questions about your subscription status?
Email us or call: +44 (0) 20 7779 8888
Subscribers to Euromoney benefit from:
- Exclusive access to euromoney.com - Read the latest issue early online, search for specific developments by region or sector, interrogate the results of Euromoney's benchmark polls, and view the archive dating back to 2000.
- 12 monthly issues of Euromoney magazine
- More than 30 specialist research guides free
- The results of Euromoneys polls and surveys
Click here to subscribe