By Bradley Keoun
Oct. 9 (Bloomberg) -- Citigroup Inc., shedding assets following last year’s $45 billion bailout, agreed to sell its Phibro LLC energy-trading business to oil producer Occidental Petroleum Corp.
Occidental will pay “net asset value” for the unit, the two companies said today in separate press releases. Specific terms weren’t disclosed. Occidental said its “net investment” in Phibro is expected to be about $250 million. Citigroup said the sale’s impact won’t be material to its earnings.
Phibro had become a flashpoint for critics of excessive compensation at banks receiving federal aid because its chief, Andrew Hall, earned more than $100 million last year under his contract with Citigroup and was on track to earn a similar amount this year.
Citigroup, based in New York, is among seven bailed-out companies that in August had to submit compensation plans for top executives to Kenneth Feinberg, the administration’s special master on pay. Chief Executive Officer Vikram Pandit, who cut his own pay to $1 this year after getting a total of $10.8 million in 2008, said last month that $100 million was too much to pay one trader.
Phibro’s management team, headed by Andrew Hall, and its employees will remain with the company after closing. The senior management team has agreed to make “a significant investment in Phibro and receive returns dependent upon the company’s future performance,” Occidental said in the statement.
Friday 9 October 2009
Citigroup Sells Phibro Trading Unit to Occidental Petroleum
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