Dubai: The deadline is looming next week for Abu Dhabi Investment Authority, the Middle East's largest sovereign wealth fund, to begin converting $7.5 billion (Dh27.5 billion) of bonds in Citigroup Inc.
Citi agreed in November 2007 to sell $7.5 billion of equity units to the fund, or Adia, at prices ranging from $31.83 to $37.24 per share. But Adia said last mid-December it's demanding that Citi scrap the deal that would see it make a heavy loss due to the fall in the bank's value.
Citigroup closed on Wednesday in New York at $3.86.
The fund is seeking more than $4 billion in damages from Citi if the deal to invest in the bank is upheld for what it alleges were "fraudulent misrepresentations" of the original agreement, Citi said in a statement last year.
A spokesmen for Adia declined to comment on whether the fund will honour the terms of the original agreement when called by Zawya Dow Jones. Citi also declined to comment. According to a memo seen by Zawya Dow Jones, the first settlement falls due on March 15, after which a share of total units will be converted every six months until September 12, 2011.
Each settlement date is subject to an extension of up to one year, the memo shows.
