WASHINGTON – Uncle Sam could turn a profit of more than $7 billion in its investment in Citigroup as it makes plans to sell the $32-billion stake it currently holds.
The U.S. government owns 27% of Citigroup as the result of a bailout and infusion of cash during the financial and liquidity crisis of 2009. Morgan Stanley has been hired to manage the sale, which is expected to occur over a six-month period.
According to analysts, at the current market price, the planned sale to investors would give the government a profit of about $7.19 billion on its original $25 billion investment under the Troubled Asset Relief Program (TARP). The U.S. Treasury owns 7.7 billion common shares, along with $5.3 billion of Citigroup trust-preferred securities and warrants to buy 465.1 million shares.
