Citi pulls out of $1.5 bln financing for Americana sale

Citigroup has dropped out of a group of banks providing a $1.5 billion bridge loan to Dubai-based investor group Adeptio for its planned purchase of a majority stake in Kuwait Food Co. (Americana), Reuters reported, citing three unnamed sources with knowledge of the matter.

The US bank failed to secure internal approval to participate in the deal, sources said, adding that the move was also related to concerns over Americana's business dealings in Iran.

Citi's withdrawal is not expected to impact Americana's ability to finalize the financing deal, as other banks would likely step in to fill its place.

Adeptio recently sought to secure an 18-month loan from the group of banks, which also includes Standard Chartered, Credit Suisse, Emirates NBD and First Gulf Bank (FGB). The funds would be used to purchase a 69 percent stake in Americana. The loan would be refinanced later with longer-term funding.

The investor group includes Mohamed Alabbar, chairman of Dubai-listed Emaar Properties, whose office confirmed in a statement that bridge loan had been “oversubscribed multiple times.”

Kuwait’s Americana owns the Middle East franchises for fast food chains KFC and Pizza Hut, in addition to a frozen food business and other units. It operates in 13 countries including Iran.