US government begins to offload Citi stock

 

US government begins to offload Citi stock

WASHINGTON - The US government announced Monday it would start selling 1.5 billion shares in Citigroup, as it begins one of the biggest stock sales in history.

By (AFP)

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Published: Mon 26 Apr 2010, 8:14 PM

Last updated: Mon 6 Apr 2015, 9:43 AM

It is the first block sale of Citigroup shares held by the government, which has begun to wind-up crisis investments in the hope of recouping taxpayers’ cash.

“The US Department of the Treasury today announced the next steps in its plan to sell approximately 7.7 billion shares of Citigroup common stock,” a statement said.

The US government owns 27 percent of the firm and shares worth around 37 billion dollars at Monday’s pre-market rates.

“Treasury will begin selling its common shares in the market in an orderly fashion under a pre-arranged written trading plan.”

The announcement comes as Washington tries to claw back the 700-billion-dollars of taxpayers’ money used to prevent the collapse of the global financial system in 2008.

At the depths of the crisis the government injected a total of 45 billion dollars into Citi, once the world’s biggest banking group.

The New York-based company faced massive losses in the wake of the mortgage crisis and came perilously close to seeing a run on its deposits as confidence in the system collapsed.

Despite repaying some 20 billion dollars to the authorities in December, Citi is still one of the last of the major banks operating in the shadow of a US government bailout.

The government had held off selling its share stake in the firm until now, no doubt dissuaded by its low market value.

The bank last week said it had returned to profit after two years spent largely in the red, posting a profit of 4.4 billion dollars in the first quarter of this year.

Since then it has risen almost 40 cents a share, a potential earning of around 300 million dollars for the Treasury.



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