UPDATE 1-Mexico's Grupo Aleman says will not proceed with Oceanografia purchase
(Adds quote, background on Oceanografia and Banamex)
MEXICO CITY Oct 14 (Reuters) - Mexico's Grupo Aleman said on Tuesday it will not go ahead with its planned purchase of troubled oil services company Oceanografia, the company's president told a local radio program.
The company had decided last week to make the purchase as part of Oceanografia's bankruptcy process, but changed its mind because of Oceanografia's unexpectedly large debt, Grupo Aleman President Miguel Aleman said.
"The total debt ... was higher than had been originally discussed and that changed things a lot," Aleman said. "Based on that information and our meetings, the board decided not to go ahead with the proposed acquisition."
The deal, announced last week, had been subject to a series of conditions including reaching agreement with Oceanografia's creditors and other interested parties.
Oceanografia is at the center of a loan scandal that cost Citigroup more than $500 million. The company was seized by Mexico's government in February after it was suspended from public contracting and accused of defrauding Citigroup's local unit Banamex. (Reporting by Elinor Comlay; Editing by Richard Chang)
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