Business

Government leaving Citigroup shares
by Milota Sidorova

After a long silence, there are news coming from the U.S. Treasury this week. Government basically agreed to end its partial ownership of remaining shares on Citigroup Inc. It reported they were sold for $4.35 each that would create approximately $12 billion gross profit for „taxpayers“. The fact is U.S. government injected more than $45 billion into Citigroup in 2008 as a part of more than $700 billion bailout. According to Tim Massad, Treasury acting assistant secretary for financial stability exiting government ownership meant meeting goals of recovering TART funds created to save „sinking“ financial institutions in times of breaking crisis. Citi! group paid back $20 billion in preffered stock and transferred $25 billion to 7.7 billion of common shares owned by Treasury. And Treasury kept decreasing its share in Citigroup during months – from 27 percent to less than 7 percent this year. The shares were sold via markets. Although Government presented $12 billion gain as a huge success, it couldn't specify the buyer of these shares. Citigroup withdrawal comes after last month's public offering in General Motors Corp. GM reduced government's stake in its shares. So far, the company released statement in which it expressed its agreement and thanks for „the support provided by the Treasury (mean taxpayers) during the financial crisis.“ Shares were expected to be closed around December 10 and the whole transaction was run by Morgan Stanley as bookrunning manager. Citigroup paid transaction fees. And although it seems Citigroup is free from Government, the Treasury continues to hold warrants to purchase i! ts shares that were part of bailout. In this case, they may be! repurch ased by Citigroup later or sold for an additional profit.

related story (sgx18733): http://news.yahoo.com/s/nm/20101207/bs_nm/us_citigroup_treas...

by Milota Sidorova for Cantell TV (http://cantell.tv)

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posted by Blog TechSource @ 3:34 PM