February 23, 2018 / 11:05 PM / 6 months ago

UPDATE 1-Commodities trader AOT Energy faces key departures, mulls sale

(Adds details about potential sale, additional departures, background)

By Liz Hampton

HOUSTON, Feb 23 (Reuters) - Senior executives are leaving Swiss commodities trader AOT Energy amid a shrinking credit line and losses in some trading operations, sources familiar with the matter said on Friday.

The tighter credit lines have prompted the company to consider looking for a partner or selling its business, one of the sources said, adding that the firm has set up a data room for potential buyers to conduct due diligence.

The upheaval comes after the company, controlled by Frère Group, a Belgian holding company owned by billionaire Albert Frère and his family, backed a buyout in 2016 that transferred a 49-percent stake in parent company, AOT Holdings, to management and some employees. The deal also gave the employees an option to buy the remaining stake in future years.

But with Frère Group reducing its holding to 51 percent, banks that had once extended some $2.5 billion in credit to the trading firm lost interest in fully funding the entity, a source close to the matter said, declining to be named.

Officials from AOT Energy and Frère Group did not respond to requests for comments.

Trading shops such as AOT Energy need lines of credit to fund operations.

Amid the turmoil, at least two executives and some traders have left or are leaving the firm, including Lance Perdue, managing director for AOT Energy Americas and U.S. finance chief Anthony Askalany, several sources said on Friday.

Both Perdue and Askalany were based in Houston.

The firm also will shut a recently opened shared-services office in Poland, which provides back office support to trading offices, a source said.

Two sources added that there would also be departures in Europe, although it was not immediately clear how many people would be affected.

Commodity trading firms and banks posted major losses in 2017 due to muted client activity and wild fluctuations across energy markets. Bonuses across the industry were low, and some hedge funds have chosen to exit energy trading. (Reporting by Liz Hampton in Houston; Additional reporting Devika Krishna Kumar in New York; Editing by Jonathan Oatis and Lisa Shumaker)

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