Shareholders of Cielo To Buy Citi’s Participation in Elavon Brazil

It is being reported that Citigroup’s stake in a credit card processing joint venture with Elavon may be bought by Brazilian lenders Banco Bradesco and Banco do Brasil.

Sources close to the deal say that it might be signed in February, although there has been no official comment from any of the parties involved in the negotiations.

It was first reported last November that Citigroup had put a for sale sign on its stake in the Elavon de Brasil venture, as it was against putting up further funds. The Central Bank of Brazil said that the joint venture was in need of more cash.

Citigroup own 49.9% of the venture which, according to the bank’s latest financial statements, has a negative equity of 195 million reais ($49m). This means that Citigroup may lose money if it sells the stake in the short-term.

Both Banco Bradesco and Banco do Brasil are controlling shareholders Brazil’s leading card payment processor, of Cielo.

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Reference: Estadão, Reuters