Citigroup insurance unit to sell 18 million shares

22 March 2010

Primerica, a life insurance unit owned by Citigroup, is to make 18 million shares available to the public in a bid to raise more than $250 million, Reuters reported.

The shares, which will be priced between $12 and $14, will be sold in addition to a 23 per cent stake private equity firm Warburg Pincus is purchasing for $230 million.

Rights for an additional $100 million worth of shares are also held by the company, the filing stated.

Once the initial public offering and sales to Warburg Pincus have been completed, Citigroup is expected to retain a stake between 32 and 46 per cent.

The sale of the unit is part of a bid by Citigroup chief executive officer Vikram Pandit to divest the company of assets to bolster its balance sheet.

Analysts expected the firm to sell the rest of its stake in Primerica once the markets have become more stable.

Citigroup was one of the worst affected banks by the global credit crisis, having to draw on $45 billion as part of the US government’s Troubled Asset Relief Program.

By Jim Ottewill

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