Citigroup reportedly planning to sell its $10-billion Citi Private Equity unit

Citigroup, the banking and financial services giant is reportedly planning to sell its $10-billion revenue Citi Private Equity unit in order to pare down debt.

As part of the financial institution's strategy to sell off non-core assets in order to reduce debt, Citigroup is planning to sell Citi Private Equity, which takes minority stakes in companies and invests in other buyout funds, oversees about $2 billion of Citigroup's money, said Bloomberg today.

Bloomberg said, citing a person familiar with the matter, that managers of the unit have discussed buying it out themselves with partners or other financing.

New York-based Citigroup, headed by Vikram Pandit, which repaid $20 billion US government loan from the Troubled Asset Relief Program (TARP), has completed 14 divestitures in Citi Holdings in 2009, including Smith Barney, Nikko Cordial Securities and Nikko Asset Management.

Citi Holdings assets declined $70 billion to $547 billion during the quarter and were down $351 billion from peak levels in the first quarter of 2008.

In December, the bank sold 5.4 billion shares at $3.15 apiece to raise $17 billion in order to exit taxpayer bailout, which is 28 per cent owned by the US government following a bailout in 2009. (See: Citi sells 5.4 billion shares to raise $20 billion for TARP repayment)

Citigroup received $45 billion in two tranches as its losses ballooned last year, but $25 billion was later converted into a 34-per cent equity stake for the US government.