Feb. 25 (Bloomberg) -- Citigroup Inc., the New York-based bank bailed out by the U.S. for $52 billion, plans to sell its stake in Brazilian credit card processor Redecard SA through a public offering, according to a securities filing.

Citigroup registered with Brazil’s securities regulator to sell shares of the Sao Paulo-based company, without setting a price for the offering, according to the filing from Redecard. Citigroup owns 17 percent of Redecard, a stake worth 2.94 billion reais ($1.24 billion) based on today’s closing price.

Chief Executive Officer Vikram Pandit is shedding Citigroup’s businesses to free up capital after the bank posted a record $18.7 billion loss in 2008. Last month he said he planned to sell the bank’s CitiFinancial consumer-finance and Primerica life-insurance units as soon as the market permits, and struck a deal to sell majority control of the bank’s Smith Barney brokerage to Morgan Stanley.

“There’s pressure to generate cash that’s building” for Citigroup, said Reginaldo Alexandre, director at equity research firm Proxycon Assessoria Financeira in Sao Paulo. “The offer will likely be a bit below market price. Investors who want to increase holdings will likely wait until the offering to buy, and that could create pressure” on Redecard shares.

Falling Shares

Redecard, the Brazilian processor of payments for Mastercard Inc., is down 6.5 percent in the past 12 months, compared with a 41 percent drop in Brazil’s Bovespa index. The stock climbed 3.89 reais today to 25.66 reais. Citigroup shares, which have plunged 90 percent in the past year, dropped 3 percent today to $2.52.

Citigroup spokesman Mike Hanretta in New York didn’t immediately return a call for comment.

Pandit says the units he’s selling are “non-core,” and that the bank will emerge as a global bank focused on its retail branches, securities trading, investment-banking and payment processing.

Citigroup said last month that it will retain its operations in Brazil, which include a retail bank with assets of almost 40 billion reais, about 120 branches and 100 stores of its consumer lender CitiFinancial, according to its Web site. Pandit, reiterating plans to retain ownership of the bank’s Banamex unit in Mexico, said at a conference last week that “the future of Citi is in emerging markets.”

Itau Unibanco Banco Multiplo SA, the Sao Paulo-based bank that owns 46.4 percent of Redecard, is unlikely to buy Citigroup’s Redecard stake, Chief Executive Officer Roberto Egydio Setubal said today in a press conference.

To contact the reporter on this story: Fabiola Moura in New York at fdemoura@bloomberg.net

Last Updated: February 25, 2009 18:58 EST