US Treasury to sell 1.5bn Citi shares

US Treasury to sell 1.5bn Citi shares
By Alan Rappeport in New York
Copyright The Financial Times Limited 2010
Published: April 26 2010 14:25 | Last updated: April 26 2010 14:25
http://www.ft.com/cms/s/0/1ca83bf0-5132-11df-aceb-00144feab49a.html


The US Treasury department said on Monday that it had authorised the sale of up to 1.5bn of Citigroup shares, as it takes its first step to offload its stake in the bank.

The Treasury said it would give Morgan Stanley, its sales agent, authority to sell more shares after this initial amount as it works to sell the common stock in an “orderly fashion”.

Last month, the Treasury department said it would sell its 27 per cent stake in Citi, with Morgan Stanley handling the sale of about 7.7bn Citi shares, which it received in exchange for its bail-out of the bank in 2008.

The sale was set to begin in December, but the US delayed those plans because Citi’s share price dropped below $3.20.

On Monday, Citi’s stock price fell by 1.7 per cent to $4.78 in pre-market trading. The Treasury expects to make about $7.5bn in profits from the sale of its Citi stake.

The US government said it would dispose separately of the Citigroup trust preferred securities or warrants for the common stock that it held.

Vikram Pandit, Citi’s chief executive, has heaped gratitude on US taxpayers for rescuing the bank and said last week at its annual meeting that he feels a “whole lot better” than he did a year ago.