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Citigroup is facing a €59 million lawsuit brought by a UK-based investment firm alleging the Wall Street bank provided “misleading” and “inaccurate” advice when acting for it on a potential public listing.
Alkimos, which wanted to raise capital to invest in the Greek property market, claimed it lost tens of millions of euros in fees after Citi bankers misled the company's management about investors' appetite for a 2018 IPO.
City denied the accusations, contained in papers submitted to the High Court in London, which were reviewed by the Financial Times.
The lawsuit focuses on Alcimos engaging Citi in late 2017 to organize and conduct early investor meetings about the potential sale of shares in a special purpose vehicle and provide feedback to the company.
Alkimos claimed that Citi inaccurately informed its management that some investors were not interested in supporting the listing. It claimed that the same investors told the company directly that they would likely be interested in participating in the IPO.
Citi, which has argued that there was not enough investor support to make the proposed IPO viable, denied that it was misrepresenting the level of investor interest.
The lawsuit is an unwelcome distraction for Citigroup, which is seeking to move past several high-profile blunders in recent years. Last year, the bank was fined $135.6 million in the US for failing to correct long-standing problems with risk control and data management, and was fined £62 million in the UK for failing to prevent a $1.4 billion trading blunder.
In emails referred to in court documents, Linos Lekkas, a senior Citi dealmaker who retired last year, apologized to Alkimos management for “any inconsistency in message delivery that we may have inadvertently included in our presentation or conveyed during any of our calls” before Termination of contract. The relationship between companies.
Alcimos then replaced Citi with Barclays in May 2018, but claimed that “the need to explain Citi's inaccurate investment comments and replace Citi all negatively impacted investor sentiment regarding the proposed IPO.”
Ultimately, it abandoned the listing because deteriorating market conditions meant “there was no longer sufficient appetite for investment”. Alkimos, which had hoped to raise up to €250 million, claimed it had “suffered losses and damages” worth €58.6 million as a result of the cancellation of the IPO. City opposed this.
In its defense filing, Citi said there was “insufficient investor appetite to proceed with the proposed IPO” and that the deal “cannot proceed if only small hedge fund investors are willing to participate or if larger investor commitments are relatively small in size.” . “.
The bank also said that although it had agreed to coordinate early investor meetings on the proposed deal, dubbed the “Alphabet Project,” it had never entered into a “legally binding agreement” to act as sole global coordinator.
Alcimos was placed into liquidation in October following a petition from a creditor, according to Companies House filings.
The case has been referred to the official receiver, part of the UK government's Insolvency Service, which is now responsible for handling the company's affairs and liquidation, according to a person familiar with the matter. A spokesman for the official receiver said he did not comment on “ongoing cases.”
Separately, Alcimos's sister company, which specializes in arranging and obtaining litigation funding, closed last year Claims Coordinator For investors affected by the collapse of Greensill Capital.
City declined to comment.
