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Citi plan to cut Treasury stake
15 Sep 2009Citigroup, the Wall Street banking giant, is working on a plan to cut the US government's stake from its current 34%.
Executives are devising a scheme to issue billions of dollars of new shares to the public, while at the same time letting the US Treasury sell down some of its holding.
The idea has yet to be pitched to the US government but has been put to banking regulators, according to the Wall Street Journal.
The US Treasury acquired 7.7 billion Citigroup shares last week when a large part of its $45 billion (£27 billion) bailout in preferred shares were converted into ordinary shares.
Taxpayers would make a profit of around $9.8 billion if the ordinary shares were sold at current prices. A sale could take place before the end of the year.
