Citi stumbles in Asia after share sale collapses

Michael Bow
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CITI was tripped up in Asia this week after it was forced to cancel a $1.25bn share sale for a division of Hyundai Motors, underscoring the ongoing volatility of sentiment in the equity market.

Just days after Goldman Sachs and UBS clinched a $7.5bn (£6bn) accelerated bookbuilding for Santander, Citi failed to complete on the sale of a 13.45 per cent stake in South Korean firm Hyundai Glovis.

Despite pricing shares between 264,000 won and 277,500 won – a discount of between 7.5 per cent and 12 per cent – Citi had to shelve the plan due to a lack of demand.

A banker who worked on the deal told Global Capital that Citi had about 70 per cent, or around $900m, of the order book covered after high international demand.

But the source said Citi failed to close the deal because local Korean investors shunned the issue over fears around Hyundai Glovis’ ownership. Hyundai Glovis is the shipping and logistics arm of the Hyundai empire.

It has prompted speculation the bank should have relied on a local institution to help run the offer to sew up local demand.

Citi declined to comment on the deal yesterday.