Citigroup joins bid for South Korean oil refinery

  • Business
  • Thursday, 27 Jan 2005

SEOUL: Citigroup Inc is offering to buy South Korea's Inchon Oil Refinery Co Ltd for 780 billion won (US$756.5mil), possibly scuppering a stalled bid by Chinese suitor Sinochem Corp, a source at the refiner said. 

Citigroup and other creditors of Inchon Oil have twice blocked a deal by Sinochem to buy the small South Korean outfit for about 630 billion won, saying they want a higher price. 

The agreement of creditors is required for the refiner to ultimately graduate from court receivership. 

“Citigroup said at the court that it would buy Inchon Oil if the deal with Sinochem fell through,” the source said. “What they said is that they would not agree to the sale to Sinochem if the Chinese company failed to raise the price up to the level of Citigroup’s offer.” 

The world’s biggest financial institution may have made the offer in an effort to protect the combined 30% of unsecured debt it holds in the refiner through wholly-owned Blue Two Asset Securitisation Specialty Ltd and Citigroup Global Markets Korea Securities Ltd, creditor sources say. – Reuters

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