US Government to sell Citigroup stake

| March 29, 2010 | 0 Comments
US Government to sell Citigroup stake

The US Treasury Department has today announced it is selling its 27% stake in Citigroup this year, in what will be one of the largest stock sales ever.

According to the department, around 7.7 billion shares in the bailed-out bank will be sold in stages.

The stock is currently worth around $33 billion (£22 billion) at current market rates.

Morgan Stanley has been elected to underwrite and advise on the sale, however, the US Treasury said the sale is “subject to market conditions.”

Citigroup, which was once regarded as one of the USA’s highly respected financial institutions, was once the world’s largest banking group.

However, fears over its financial health intensified and as a result, its share price has lost around 90% in value since late 2006.

The bank suffered massive losses after the sub-prime mortgage crisis and it was forced to accept three Government bailouts in 2008 and 2009.

The announcement of the stock disposal comes as the Obama administration plans to claw back the $700 billion of American taxpayers money used for the banking bailouts.

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