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Abu Dhabi to invest $7.5B in Citigroup

  |   Nov. 27, 2007 at 10:28 AM
NEW YORK, Nov. 27 (UPI) -- Citigroup, trying to bolster investor confidence, said it will receive a $7.5 billion infusion of capital from the investment arm of the Abu Dhabi government.

Citigroup announced the transaction late Monday. The Abu Dhabi Investment Authority would become one of the bank's biggest shareholders, with an interest of no more than 4.9 percent, The Wall Street Journal reported Tuesday.

The investment will help rebuild Citigroup's capital levels, which have been eaten away by the credit crunch. Chief Executive Officer Charles Prince resigned in early November after Citibank, which had written off billions of dollars, said it faced up to $11 billion more in losses.

"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, Citibank's acting CEO, said in a statement.

"This investment reflects our confidence in Citi's potential to build shareholder value," said Sheik Ahmed Bin Zayed Al Nahayan, ADIA's managing director.

In exchange for its investment, the authority will receive convertible Citigroup stock yielding 11 percent annually. The shares are required to be converted into common stock between March 2010 and September 2011, the Journal reported.

© 2007 United Press International, Inc. All Rights Reserved. Any reproduction, republication, redistribution and/or modification of any UPI content is expressly prohibited without UPI's prior written consent.
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