US government to acquire 34-per cent stake in Citigroup
30 Jul 2009
The US government will become Citigroup's largest shareholder today, when it takes a 34 per cent equity stake in the nation's third-largest bank Citigroup Inc, as part of the bailout plan.
That means America's 148 million taxpayers effectively become the bank's owners.
The change follows the completion of two exchange offers designed to strengthen the capital position of the troubled lender.
Investors have agreed to swap $32.8 billion of preferred securities for common stock, and the government will swap $25 billion, the New York-based bank said.
"The successful completion of the exchange offers marks a significant milestone for Citi," Vikram Pandit, Citgroup CEO had said in a statement on Sunday.
"Citi will have approximately $100 billion of Tangible Common Equity (TCE) and a Tier 1 Common ratio of approximately 9 per cent based on our June 30 results. That unquestioned financial strength combined with our strategy to return Citi to its core franchise of institutional and consumer businesses spanning an unmatched global footprint are driving Citi's return to sustained profitability and growth," he added.
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