The U.S. government is resuming sales of its stock in Citigroup Inc. after suspending them at the end of June for a “blackout period” preceding a July 16 report on the U.S. bank’s second-quarter earnings.
The Treasury Department, which currently owns 5.1 billion Citigroup shares, or an 18 percent stake, said in an e-mailed statement today it has granted discretion to broker Morgan Stanley to sell another 1.5 billion shares. The Treasury, which began selling down its stake in April, has said it wants to liquidate the rest by the end of the year.
The bank’s stock price climbed 8.8 percent from June 30 through yesterday’s closing price of $4.09 in New York trading. Since the sales began in April, Treasury has received $10.5 billion of gross proceeds for 2.6 billion shares, or an average of $4.04 each.
The government got its stock in Citigroup, the third-biggest U.S. bank, last year after agreeing to convert $25 billion of bailout funds into common shares at a price of $3.25 each, for a total of 7.7 billion shares and a 27 percent stake. The New York-based bank received a $45 billion rescue in 2008 and repaid $20 billion in December.