Citigroup Inc is considering selling its Japanese investment banking unit, Nikko Citigroup, in addition to the brokerage unit that has already been put up for sale, the Mainichi newspaper reported.
Earlier this month Citigroup formally began the process of selling the brokerage unit, Nikko Cordial Securities, as part of its efforts to shed non-core assets globally and survive the deepening financial crisis.
Citigroup, which originally did not plan to part with Nikko Citigroup, is considering selling it and Nikko Cordial as a set to maximise the sale price, the Mainichi reported on its website without citing sources.
A spokeswoman for Citigroup in Japan declined to comment.
Citigroup is concerned that selling Nikko Cordial on its own would lead to a drop in corporate value as it would not allow the buyer to fully benefit from cooperation between the brokerage and investment banking operations, the Mainichi said.
Japan's top three banks, Mitsubishi UFJ Financial Group, Mizuho Financial Group and Sumitomo Mitsui Financial Group have all shown interest in buying Nikko Cordial, sources have told Reuters.
The report comes as Citigroup talks with federal regulators on a plan for the government to increase its stake in the third-biggest U.S. bank in terms of assets, a person familiar with the matter has told Reuters.
Showing posts with label Citigroup Global Markets Ltd. Show all posts
Showing posts with label Citigroup Global Markets Ltd. Show all posts
Wednesday, February 25, 2009
Friday, October 10, 2008
TCS picks up Citi’s back-office business
Bangalore: Citigroup Inc., reeling from $61 billion (Rs2.97 trillion) in credit-related losses, agreed to sell its back-office unit in India for $505 million in cash to Tata Consultancy Services Ltd, or TCS, as the deepening financial crisis forces banks to raise funds.
As part of the accord, Citigroup will award orders worth $2.5 billion over nine-and-a-half years to TCS, India’s largest software services provider said in an emailed statement on Wednesday.
Big deal: S. Ramadorai says the move will help drive TCS’ growth. AFPCitigroup, which is battling with Wells Fargo and Co. to buy the deposits of Wachovia Corp., is also cutting 500 jobs and reducing by 90% the number of independent mortgage brokers it does business with, a company spokesman said.
The deal allows TCS to more than double its number of back-office workers, helping the it widen its lead over Infosys Technologies Ltd and Wipro Ltd.
“We view this as a positive move for TCS,” Diviya Nagarajan, a Mumbai-based analyst at JM Financial Ltd, said in an emailed note to clients. The deal gives the Indian provider “much needed visibility and stability with a top client in the context of the current demand environment”, she wrote.
“This transaction will complement our domain expertise and bring new capabilities to TCS that will help drive growth,” the company’s chief executive S. Ramadorai said.
TCS said the deal, expected to close this quarter, will start contributing to revenue in the March 2009 quarter.
Citigroup Global Services Ltd, formerly known as E-serve International, employs 12,000 back-office workers and offers transaction processing and customer services for the New York-based financial firm’s businesses globally, according to its website.
TCS employed about 8,000 back-office workers, N.V.K. Raman, head of Tata’s back-office outsourcing unit, had said in a February interview.
The sale “fits squarely into (Citigroup CEO) Vikram (Pandit)’s goal to reorganize Citi, strengthen our balance sheet, divest assets that are not aligned with our growth strategy to free up resources that can be better used as investments in higher-growth, higher-return opportunities,” Sanjay Nayar, chief executive of Citigroup’s India operations, wrote in an email to employees. “This is a strategic step in Citi’s stated objective to focus on our core competencies.”
Talks for Genpact Ltd to buy the Citigroup back-office division failed after the firm was unwilling to pay $700 million for the division, The Economic Times had reported in February, citing unidentified people.
The deal comes two days after Nomura Holdings Inc., Japan’s biggest securities firm, agreed to buy the back-office operations of Lehman Brothers Holdings Inc. in Mumbai, which employed 3,000 workers. Nomura is also buying the Asian, West Asian and European operations of Lehman, which filed for bankruptcy last month.
TCS has no plan to merge the Citigroup unit with itself, and will retain the current management team, chief operating officer N. Chandrasekaran told reporters.
In 2004, General Electric Co. sold 60% of its Indian back-office unit, now Genpact, for $500 million to buyout firms General Atlantic Llc. and Oak Hill Capital Partners Lp. British Airways Plc. sold its controlling stake in WNS Holdings Ltd in 2002.
Citigroup has the largest amount of losses tied to the collapse of the mortgage market with $61 billion, followed by Wachovia Corp.’s $53 billion, according to data compiled by Bloomberg. Globally, asset write-downs and credit losses have cost the world’s biggest banks and securities firms a combined $593 billion, according to Bloomberg data.
Shares of TCS fell 5.07% to close at Rs546.60 each on the Bombay Stock Exchange on Wednesday, on a day when the exchange’s benchmark Sensex index fell 3.14% to 11,328.36. TCS shares have lost 51% this year compared with a 45% decline for the Sensex.
As part of the accord, Citigroup will award orders worth $2.5 billion over nine-and-a-half years to TCS, India’s largest software services provider said in an emailed statement on Wednesday.
Big deal: S. Ramadorai says the move will help drive TCS’ growth. AFPCitigroup, which is battling with Wells Fargo and Co. to buy the deposits of Wachovia Corp., is also cutting 500 jobs and reducing by 90% the number of independent mortgage brokers it does business with, a company spokesman said.
The deal allows TCS to more than double its number of back-office workers, helping the it widen its lead over Infosys Technologies Ltd and Wipro Ltd.
“We view this as a positive move for TCS,” Diviya Nagarajan, a Mumbai-based analyst at JM Financial Ltd, said in an emailed note to clients. The deal gives the Indian provider “much needed visibility and stability with a top client in the context of the current demand environment”, she wrote.
“This transaction will complement our domain expertise and bring new capabilities to TCS that will help drive growth,” the company’s chief executive S. Ramadorai said.
TCS said the deal, expected to close this quarter, will start contributing to revenue in the March 2009 quarter.
Citigroup Global Services Ltd, formerly known as E-serve International, employs 12,000 back-office workers and offers transaction processing and customer services for the New York-based financial firm’s businesses globally, according to its website.
TCS employed about 8,000 back-office workers, N.V.K. Raman, head of Tata’s back-office outsourcing unit, had said in a February interview.
The sale “fits squarely into (Citigroup CEO) Vikram (Pandit)’s goal to reorganize Citi, strengthen our balance sheet, divest assets that are not aligned with our growth strategy to free up resources that can be better used as investments in higher-growth, higher-return opportunities,” Sanjay Nayar, chief executive of Citigroup’s India operations, wrote in an email to employees. “This is a strategic step in Citi’s stated objective to focus on our core competencies.”
Talks for Genpact Ltd to buy the Citigroup back-office division failed after the firm was unwilling to pay $700 million for the division, The Economic Times had reported in February, citing unidentified people.
The deal comes two days after Nomura Holdings Inc., Japan’s biggest securities firm, agreed to buy the back-office operations of Lehman Brothers Holdings Inc. in Mumbai, which employed 3,000 workers. Nomura is also buying the Asian, West Asian and European operations of Lehman, which filed for bankruptcy last month.
TCS has no plan to merge the Citigroup unit with itself, and will retain the current management team, chief operating officer N. Chandrasekaran told reporters.
In 2004, General Electric Co. sold 60% of its Indian back-office unit, now Genpact, for $500 million to buyout firms General Atlantic Llc. and Oak Hill Capital Partners Lp. British Airways Plc. sold its controlling stake in WNS Holdings Ltd in 2002.
Citigroup has the largest amount of losses tied to the collapse of the mortgage market with $61 billion, followed by Wachovia Corp.’s $53 billion, according to data compiled by Bloomberg. Globally, asset write-downs and credit losses have cost the world’s biggest banks and securities firms a combined $593 billion, according to Bloomberg data.
Shares of TCS fell 5.07% to close at Rs546.60 each on the Bombay Stock Exchange on Wednesday, on a day when the exchange’s benchmark Sensex index fell 3.14% to 11,328.36. TCS shares have lost 51% this year compared with a 45% decline for the Sensex.
Wednesday, September 24, 2008
Etisalat to acquire 45% stake in Swan Telecom for $900 million
New Delhi: The second largest Arab telecom company by market value, Emirates Telecommunications Corp., or Etisalat, said on Tuesday it has agreed to buy a 45% stake in Swan Telecom Pvt. Ltd that recently acquired licences to provide mobile telephony in India.
The deal would have to be cleared by the Foreign Investment Promotion Board, or FIPB, telecom minister A. Raja said on the sidelines of a function in New Delhi.
United Arab Emirates-based Etisalat said by email from Abu Dhabi that it has agreed to buy some 45% of Swan Telecom for cash up to $900 million (Rs4,113 crore).
The remaining 55% of the shares of Swan Telecom are held by several entities, including its promoters Dynamix Balwas Group, the email said.
New connection: A mobile telecom tower. Swan Telecom has licences to provide mobile phone services in 10 out of 22 circles in India. Harikrishna Katragadda / MintSeparately, Swan Telecom’s managing director, Shahid Balwa, said: “As of today, we have got spectrum in 10 circles. We will be launching our first operation in the first quarter of next financial year. The spectrum in 10 circles includes the lucrative Delhi service area.”
The Business Standard newspaper first reported on Tuesday that Etisalat would pick up 49% in Swan Telecom and increase the stake to 51% after FIPB approved the deal, quoting unnamed sources.
Etisalat offers phone services in 16 countries across Asia, West Asia and Africa, servicing more than 64 million customers. The company reported annual net revenues of $5.8 billion and net profits of $1.83 billion for 2007.
Etisalat also has a fully owned subsidiary in Bangalore, Etisalat Software Solutions, that sells operational and billing support systems to the telecom industry.
Mumbai-based real estate and hospitality group Dynamix Balwas Group has assets of about $4 billion.
Swan Telecom has got licences to provide mobile phone services on the GSM, or global system for mobile communications, technology platform in 10 out of 22 telecom circles in India, and is awaiting clearance for another two circles, the company said.
“This is good news as the move to expand globally beyond its operations in the UAE is expected to be viewed positively because that way it diversifies its operations and does not depend on only one market,” said Sherif Abdelkhalek, institutions account manager at Beltone Financial, an investment bank operating in West Asia and North Africa.
“The share price might not immediately react to the news because of current market conditions but in the long and medium term, this will benefit revenues and share price,” Abdelkhalek said.
Citigroup Global Markets Ltd and Deutsche Bank AG were advisers for Etisalat and Swan Telecom, respectively.
Swan Telecom’s Balwa said Indian shareholders would remain the controlling stakeholders in Swan Telecom after the Etisalat deal.
A telecom expert said Etisalat always wanted to come to India and only new players could be its potential candidates. “Given the telecom licence and roll-out obligations, and what they want to do, there is always a certain valuation attached to it,” said Rajesh Jain, national industry director for information, communication and entertainment practice at consultancy KPMG India Pvt. Ltd.
The deal would have to be cleared by the Foreign Investment Promotion Board, or FIPB, telecom minister A. Raja said on the sidelines of a function in New Delhi.
United Arab Emirates-based Etisalat said by email from Abu Dhabi that it has agreed to buy some 45% of Swan Telecom for cash up to $900 million (Rs4,113 crore).
The remaining 55% of the shares of Swan Telecom are held by several entities, including its promoters Dynamix Balwas Group, the email said.
New connection: A mobile telecom tower. Swan Telecom has licences to provide mobile phone services in 10 out of 22 circles in India. Harikrishna Katragadda / MintSeparately, Swan Telecom’s managing director, Shahid Balwa, said: “As of today, we have got spectrum in 10 circles. We will be launching our first operation in the first quarter of next financial year. The spectrum in 10 circles includes the lucrative Delhi service area.”
The Business Standard newspaper first reported on Tuesday that Etisalat would pick up 49% in Swan Telecom and increase the stake to 51% after FIPB approved the deal, quoting unnamed sources.
Etisalat offers phone services in 16 countries across Asia, West Asia and Africa, servicing more than 64 million customers. The company reported annual net revenues of $5.8 billion and net profits of $1.83 billion for 2007.
Etisalat also has a fully owned subsidiary in Bangalore, Etisalat Software Solutions, that sells operational and billing support systems to the telecom industry.
Mumbai-based real estate and hospitality group Dynamix Balwas Group has assets of about $4 billion.
Swan Telecom has got licences to provide mobile phone services on the GSM, or global system for mobile communications, technology platform in 10 out of 22 telecom circles in India, and is awaiting clearance for another two circles, the company said.
“This is good news as the move to expand globally beyond its operations in the UAE is expected to be viewed positively because that way it diversifies its operations and does not depend on only one market,” said Sherif Abdelkhalek, institutions account manager at Beltone Financial, an investment bank operating in West Asia and North Africa.
“The share price might not immediately react to the news because of current market conditions but in the long and medium term, this will benefit revenues and share price,” Abdelkhalek said.
Citigroup Global Markets Ltd and Deutsche Bank AG were advisers for Etisalat and Swan Telecom, respectively.
Swan Telecom’s Balwa said Indian shareholders would remain the controlling stakeholders in Swan Telecom after the Etisalat deal.
A telecom expert said Etisalat always wanted to come to India and only new players could be its potential candidates. “Given the telecom licence and roll-out obligations, and what they want to do, there is always a certain valuation attached to it,” said Rajesh Jain, national industry director for information, communication and entertainment practice at consultancy KPMG India Pvt. Ltd.
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