UPDATE 1-Barclays sells CO2 credit firm Tricorona

Tue Jul 24, 2012 7:20pm IST

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LONDON, July 24 (Reuters Point Carbon) - Barclays has sold carbon project developer Tricorona back to the company's management, the UK-headquartered investment bank said on Tuesday, two years after it bought the Sweden-based firm for $159 million.

"Barclays confirms it has sold its equity interest in Tricorona to management," a spokeswoman told Reuters Point Carbon via email.

Neither party would provide further details including the value, date or reason for the deal, but a well-placed source said Barclays had sold its entire stake, which amounted to 85.7 percent of Tricorona.

Barclays paid $159 million for control of Tricorona in 2010, representing a 40 percent premium over the company's shares before deal was announced.

Back then, the U.N.-backed carbon credits Tricorona originates and sells were priced around 13 euros each, a far cry from the record low of 2.82 euros plumbed by benchmark futures last week due to a massive oversupply mixed with crumbling demand.

The deal was placed under scrutiny late last year when UK carbon trading and advisory firm CF Partners launched an 82-million euro lawsuit against Barclays claiming it misused confidential information to clinch the takeover, an allegation the British bank has rejected.

A copy of the lawsuit, seen by Reuters Point Carbon in December, showed CF Partners claimed that it first identified Tricorona as an attractive takeover prospect and in around August 2008 approached Barclays for financing and help with a possible deal.

The bank signed a confidentiality agreement and provided advisory services to CF Partners that would have netted Barclays around 15 million pounds in fees, the lawsuit said.

CF Partners declined to comment on Tricorona's management buy-out or on the ongoing lawsuit between itself and Barclays.

GROWING TREND

Barclays' move is the latest in a growing trend by major banks that look to be scaling back their activities in the once, red-hot carbon market.

Morgan Stanley's purchase of a 38 percent stake in Miami-based project developer MGM International in 2007 kicked off the craze of major financial institutions investing in offset developers, but by 2010 it had sold its investment.

JP Morgan disposed of its voluntary offset provider Climate Care last year after management sought to buy back the company, and reduced head count by 25 percent at its compliance offset developer EcoSecurities in April amid low carbon prices.

The financial services giant beat off stiff competition from Tricorona, EDF Trading, and holding company Guanabara to buy Ecosecurities for 123 million pounds ($193 million) in 2009, a 120 percent premium on its share price before the bidding war began.