US Treasury sets final sale of Citi common shares

December 07, 2010 | 09:49

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The US Treasury said Monday it was launching the sale of its remaining common stock in banking giant Citigroup acquired in a taxpayer-funded bailout amid the 2008 financial crisis.

The Treasury said it was putting on the market about 2.4 billion shares of Citigroup's common stock.

"Completion of the offering would depend on whether it receives an acceptable price for the shares," it said.

The Treasury announcement came after the US stock markets closed. Citi shares were down five cents (1.12 per cent) to $4.40 in after-hours trading after closing, unchanged from Friday.

The Treasury invested a total of $45 billion in Citigroup through the Troubled Asset Relief Program, set up to stabilise the financial system after the Lehman Brothers bankruptcy in September 2008.

Citigroup, once the world's largest bank, received 25 billion TARP dollars in October 2008 and 20 billion in January 2009.

The Treasury said it has disposed on the market about 5.3 billion of the 7.7 billion common shares it had received in July 2009 in exchange for $25 billion in preferred Citi stock, part of the government's aid rescue package.

"This proposed offering would dispose of Treasury's remaining shares of Citigroup common stock," it said.

Upon completion of the sale, the Treasury said it would continue to hold warrants for Citigroup’s common stock and could receive up to $800 million in trust-preferred securities linked to government guarantees of the bank's debt.

AFP

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