US$7.5bil injection for Citigroup

NEW YORK: Citigroup, reeling from the US housing slump and a related credit squeeze, announced on Monday it will receive a US$7.5 billion (K21.89 billion) injection from the Abu Dhabi government.
America’s second biggest banking group, Citigroup said it had agreed to sell the Abu Dhabi Investment Authority (ADIA) US$7.5 billion worth of “equity units,” with mandatory conversion into common shares, elevating the ADIA’s total holding in Citigroup to 4.9%.
“This investment, from one of the world’s leading and most sophisticated equity investors, provides further capital to allow Citi to pursue attractive opportunities to grow its business,” Win Bischoff, Citigroup’s acting chief executive said in a statement.
The agreement will build “on a series of actions we have taken over the past several months to strengthen our capital base,” Bischoff said.
“This investment also enables us to access capital in an efficient manner, and is consistent with our strategy of maintaining a balance sheet that benefits from highly diverse sources of funding in terms of both geography and type of security,” he added.
ADIA had agreed to limit its holding in Citigroup to no more than 4.9%, and it will not receive special rights of ownership or control, the banking group said in its statement.
ADIA will not have any role in the bank’s management or governance. – AFP