NEWSBREAK: Reuben Brothers nearing sale of equity in Metro warehouses to Jiu Tian Group
Reuben Brothers is in advanced discussions to sell a majority stake in metals warehouse company, Metro International Trade Services, to Yunnan Jiu Tian Investment Holdings Group, sources told Metal Bulletin.
The negotiations, which were first reported by Metal Bulletin last month, are understood to have started in April and be close to completion.
Yet Reuben Brothers and Jiu Tian Group declined to comment when contacted by Metal Bulletin.
A well-informed source said that Reuben Brothers was planning to sell around 70% in Metro, while another source said discussions were “not yet finalized.”
Jiu Tian Group is a China-based company also operating in Singapore, established in 2001, that specializes in supply chain management and commercial factoring services and “aims to expand into the commodity sector”, among other fields, according to the company’s website.
The equity sale focuses on the warehousing business - the brand, the people and the stocks - rather than the real estate, which Reuben Brothers want to keep a hold on, sources said.
2018 has been a particularly challenging year for LME warehousing businesses due to a lack of available supply, rising operating costs and stringent rules set out by the London Metal Exchange. Worldwide Warehouse Solutions (WWS) has gone bankrupt and Katoe Natie exited LME operations, while many companies across the world have reduced space dedicated to LME business.
Reuben Brothers purchased Metro International from Goldman Sachs in December 2014.
Metro, which specializes in the storage and handling of non-ferrous metals listed on the LME, then had around 100 warehouses in eight countries across three continents. Today Metro has 32 LME-approved warehouses including 19 in the United States and eight in South Korea, according to LME data on July 6.
Metro, founded in Michigan by Bill Whelan and Ed Schulak in the late 1980s, was acquired by Goldman Sachs in 2010.