SYDNEY -- Citibank Ltd., the Australian unit of Citicorp, has apppointed a receiver "to protect its interests" in the financially squeezed International Brewing Holdings.
International Brewing and its subsidiaries hold a 38% stake in Foster's Brewing Group, the world's fourth-biggest brewer, with operations in Australia, Britain, and Canada.
International Brewing borrowed heavily to acquire its Foster's stake. Now, banks and other creditors are trying to collect on their loans.
James Millar of Ernst & Young was named to represent Citibank Ltd. as receiver to International Brewing Securities and Tendral Proprietary Ltd. The two companies own about 6% of Foster's.
On Wednesday, Citibank said its receiver would "hold discussions with parties interested in the purchase" of the 6% Foster's stake it controls, "to maximize the value of Citibank's security."
Citibank is owed the U.S. equivalent of $253 million by International Brewing and holds the stake in Foster's as security.
Broken Hill Made Offer
Hongkong and Shanghai Banking Corp. and other institutions in a syndicate known as the Vextin group are owed the Australian equivalent of about $867 million, secured by a 32% stake in Foster's. As reported July 6, the Vextin syndicate appointed a receiver to International Brewing and certain subsidiaries.
Broken Hill Proprietary Co., Australia's biggest conglomerate, is owed an additional amount of approximately $723 million. It appointed a receiver to International Brewing in June.
Broken Hill last week offered to buy the 32% Foster's stake for the equivalent of more than $1.1 billion. It said it is prepared to become a long-term investor in Foster's but wants influence in the brewing company through a direct holding.
The receiver to International Brewing appointed by the Vextin banks responded that the offer might be accepted, but other possible buyers of the 32% Foster's stake will first be sought.