Billiton pulls out of bid for CVG
Friday 04 September 1998
"The state of the world economy and global financial markets had presented the consortium with unanticipated challenges and made it increasingly difficult to bring the consortium's preparations to bid to a successful conclusion," the company said.
The British-based firm led the sole consortium qualified to bid for 70 per cent of the CVG aluminium assets which the Venezuelan government is trying to privatise for the thrid time next week, at a base price of $1.55bn (pounds 930m) .
The group, which also includes Kaiser Aluminium and Venezuela's Sural, was also the only bidder in July's sale attempt of the loss-making complex, which produces 4 per cent of the world's aluminium. But the consortium withdrew at the last minute over differences in the make-up of the consortium. The first attempt to privatise CVG failed in March when prospective bidders withdrew.
Industry sources said the financial turmoil in global markets probably made it difficult for some consortium partners to obtain adequate funding.
The economic crises in Russia and Asia also raised concerns about investment in emerging markets generally, while specific concerns have increased over the political and economic position in Venezuela, sources said.
The cancellation of the auction is a fresh blow to Venezuela's image, as foreign investors had been looking to the long-delayed privatisation for reassurance that economic reforms were on track.
Billiton shares yesterday fell 1p to 113p.
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