Monday, November 24, 2008

Citigroup piracy

The Somali pirates, renegade Somalis known for hijacking ships for ransom in the Gulf of Aden, are negotiating a purchase of Citigroup.
The pirates would buy Citigroup with new debt and their existing cash stockpiles, earned most recently from hijacking numerous ships, including most recently a $200 million Saudi Arabian oil tanker. The Somali pirates are offering up to $0.10 per share for Citigroup, pirate spokesman Sugule Ali said earlier today. The negotiations have entered the final stage, Ali said. ``You may not like our price, but we are not in the business of paying for things. Be happy we are in the mood to offer the shareholders anything," said Ali.
The pirates will finance part of the purchase by selling new Pirate Ransom Backed Securities. The PRBSs are backed by the cash flows from future ransom payments from hijackings in the Gulf of Aden. Moody's and S&P have already issued their top investment grade ratings for the PRBSs.
Head pirate, Ubu Kalid Shandu, said "we need a bank so that we have a place to keep all of our ransom money. Thankfully, the dislocations in the capital markets has allowed us to purchase Citigroup at an attractive valuation and to take advantage of TARP capital to grow the business even faster."
Shandu added, "We don't call ourselves pirates. We are coastguards and this will just allow us to guard our coasts better."
Commentators noted that Citigroup is regarded as a super-tanker in financial markets - hard to turn around - and given that management such as senior advisor and director Robert Rubin (who has pocketed more than $118 million in salary, bonus and stock-based compensation) have been acting as pirates for years, Citigroup clients and markets will not see much difference.

(Source: e-mail from DBS Vickers)


Blogger Ellee Seymour said...

they must be the richest coastguards in the world.

6:26 pm  
Anonymous Anonymous said...

TARP capital ?

2:47 pm  

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