Citi scrapped plans to buy a $50 million corporate jet after it raised eyebrows all the way to the White House. Politicians called the order, which was made in 2005, wasteful.
True, Citi has been propped up by taxpayers, swallowing up $45 billion of capital since October. Its market value is now only about $17 billion. And it has lost more than $28.5 billion in the last 15 months.
But how unusual is it for a company the size of Citi, once the world’s largest bank, to have a corporate jet?
It is not as if Citi placed an order for it in November, when it got the $20 billion emergency cash infusion. Cancelling the Dassault Falcon 7X order is actually going to cost money. The bank placed a deposit on the jet when it agreed to buy it. And it will likely have to pay a penalty for not buying the plane, the amount of which is being negotiated.
Citi is down. And the jet became an excuse to kick it, which is probably well-deserved. But should a bank really be micromanaged by popular vote?
DEALS OF THE DAY
** The world’s top oil seed processor Bunge is in talks to buy a strategic stake in sugar firm GMR Industries to gain entry into sugar making, a newspaper reported citing an unnamed source.
** The heirs of the founder of Roche Holding have decided to extend their agreement to exercise a majority shareholding in the Swiss drugmaker, private bank Scobag said.
** Britain’s VT Group said it would sell its 45 percent stake in its BVT Surface Fleet naval shipbuilding operations to its joint-venture partner BAE Systems for a minimum 380 million pounds ($536 million).
**Israeli conglomerate Africa Israel Investments said it signed a memorandum of understanding to sell its 50 percent stake in the Gottex swimwear venture to its partners for $50 million.
** Britain’s business support group Hargreaves Services bought the remaining 50 percent stake in Coal4Energy Ltd from UK Coal Plc for 9 million pounds ($12.70 million), the companies said.
** Norwegian engineering company Aker Solutions ASA said that it had bought the remaining 50 percent of the German drilling equipment firm WIRTH.
** Drug maker Piramal Healthcare Ltd said it had acquired the inhalation anaesthetic gas distribution unit of U.S.-based RxElite Inc for about $4.2 million in cash.
** A group of Spanish investors, Catalana D’Iniciatives, is finalising an offer for SAS unit Spanair, a spokesman for the Barcelona-based consortium said.
** Dutch market maker All Options has agreed to buy Dutch proprietary trading company Saen Options to strengthen All Options’s position in Europe and Asia, All Options said.
** Shares in Veolia rose on Wednesday after a report in French weekly L’Express said U.S. funds were eyeing a stake in the French water and waste management group.
** Lanxess could buy Indian peer Gwalior Chemical Industries Ltd. or another small or mid-sized company on the subcontinent, a person familiar with the plans told Reuters.
** Shares in Satyam Computer Services rallied on Wednesday, extending gains to an eighth session, after the fraud-hit outsourcer’s new board said there had been wide bidding interest and a transparent process would be devised.
** British construction materials group Ennstone Plc’s shares were suspended on Wednesday after it said the chance of sales and refinancing talks concluding successfully had “diminished greatly”.
(Photo: REUTERS/Alywin Chew)