Govt considering up to 40% stake in Citigroup
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The US government is considering taking a stake in Citigroup, The Wall Street Journal reported on Sunday. The paper said the government may buy up to 40% of Citigroup common stock but bank executives hope for only 25%.
AFP - The US government is in talks that could lead to it taking take a 25-40 percent stake in Citigroup, The Wall Street Journal reported Sunday.
"While the discussions could fall apart, the government could wind up holding as much as 40 percent of Citigroup's common stock. Bank executives hope the stake will be closer to 25 percent," the paper reported citing unnamed people familiar with the situation.
"The proposal was made by Citigroup to its regulators. The (Barack) Obama administration hasn't indicated if it supports the plan," the report said citing people with knowledge of the talks.
The price at which the government woul convert its preferred stock into common shares has yet to be resolved, the Journal said.
"Citigroup Chief Executive Vikram Pandit huddled Sunday with his senior executives to fine-tune its pitch to the Obama administration," it added.
Were the deal to be ironed out it would be the US government's third bid to help Citigroup in several months.
In October, Treasury poured 125 billion dollars into eight financial giants including 25 billion dollars for Citigroup, in exchange for preferred shares and warrants to buy stock.
In November the government agreed to pump another 20 billion dollars into Citigroup as its stock tumbled. It then agreed to protect the banking company against most losses on a 301 billion dollar pool of assets.
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