US Treasury sells almost 20% of Citigroup shares

28 May 2010

The US Treasury has sold 19.5 per cent of its Citigroup holdings to make a profit of $6.2 million.

According to the authorities, the figure accounts for 1.5 billion of the 7.7 billion shares it received from the investment bank.

The assets are being sold by the US government to recoup some of the costs of the bailout scheme, known as the Troubled Asset Relief Program (TARP).

Up to $700 billion was provided through TARP to prop up ailing financial firms in the wake of the global credit crisis.

Stephen Cohen, a spokesman for Citigroup, told Bloomberg: “We are pleased that [the]Treasury is making significant progress in profitably selling its common shares in Citi.”

Morgan Stanley, which is working as sales agent for the stock, has been authorised to sell a further 1.5 billion shares between now and June 30th before Citigroup prepares its financial records for the second quarter.

The US Treasury converted £25 billion worth of warrants into stock after it provided Citi with a total of $45 billion through TARP.

By Jim Ottewill

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