Citigroup Reaches Deal with Government

By: Associated Press
By: Associated Press

Citigroup says the deal is done and the government is getting an increased stake in the struggling bank.

The U.S. government will exchange up to $25 billion in emergency bailout money for as much as a 36-percent equity stake.

The deal is contingent on private investors also agreeing to a similar swap.

But it will not require more taxpayer dollars.

The conversion will help provide Citi the mix of capital needed to withstand further weakening in the economy. The stock-conversion option gives the government greater flexibility in dealing with ailing banks. It also gives the government voting shares, and therefore more say in a bank's operations.

Investors appeared disappointed in the deal and expected dilution of their stake, sending shares plummeting 94 cents to $1.56 in premarket trading.

Citi will also reshape its board of directors.

You must be logged in to post comments.

Password (case sensitive):
Remember Me:
KKTV 520 E. Colorado Colorado Springs, CO 80903 Office: (719) 634-2844 Fax: (719) 632-0808 News Fax: (719) 634-3741
Copyright © 2002-2016 - Designed by Gray Digital Media - Powered by Clickability 40419107 -
Gray Television, Inc.