Tuesday, December 2, 2008

Bailed-Out Citi Bank Goes on Toll Road Buying Binge

Can you believe this? After securing over $326 billion in bailout money and  debt guarantees, Citigroup just purchased a debt burdened Spanish toll road for $10 billion! 

I say if Citigroup has an extra $10 billion laying around then why not give it back to the american taxpayers that just bailed their asses out. 

From Moneynews.com -

" Debt-laden Spanish construction company Sacyr Vallehermoso said Monday it has agreed to sell its highway-operating unit, Itinere, to a Citigroup Inc. fund in a deal valued at nearly euro7.9 billion ($10 billion).

The sale involves euro2.87 billion in cash and euro5 billion in assumed debt, the company said.

Sacyr Vallehermoso has been hard hit by the collapse of Spain's real estate bubble and is eager to ease its debt load.

The sale of Itinere to Citi Infrastructure Partners, which needs regulatory approval, will reduce the Spanish builder's debt to about euro12.5 billion, the latter said in a filing with Spanish stock market regulators.

If this deal goes through, Sacyr Vallehermoso will have cut its debt by 37 percent since Jan. 1, it said.

Much of its debt stems from its acquisition two years ago of a 20 percent stake in Spanish oil company Repsol-YPF.

In September, Sacyr Vallehermoso put that stake up for sale and the Russian oil company Lukoil recently expressed interest in acquiring it.

The money Sacyr Vallehermoso would take in from the Citigroup deal is expected to reduce pressure to sell its stake in Repsol-YPF.

Citi Infrastructure Partners will offer to buy all of Itinere's stock at euro3.96 ($5.04) a share, the Spanish firm said.

The Spanish construction company will first sell Citigroup a 42.8 percent stake in Itinere, and once this is complete, another 11.6 percent stake, Sacyr Vallehermoso said.

After the acquisition, Citi Infrastructure Partners will resell some Itinere highways in Spain and Chile to Spanish infrastructure company Abertis for 621 million euros ($790 million), Sacyr Vallehermoso said."


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