By Peter Schroeder - 12/07/10 02:39 PM EST
On Monday night, Treasury announced it was selling roughly 2.4 billion shares of Citigroup common stock. When coupled with an earlier sale of 5.3 billion Citi shares by the government, completing the new sale will remove all Citi common stock shares from Treasury's books.
Treasury later announced it had reached a pricing agreement to sell the shares at $4.35. When the Treasury agreed to buy 7.7 billion of Citi shares in July 2009, each share was valued at $3.25. The Treasury's previous sale of Citi shares was priced at $4.05 a share.
Treasury invested a total of $45 billion in Citi as part of the Troubled Assets Relief Program during the financial crisis. With the offering, the Treasury has recovered all of its investment. The uptick in the stock price means the government earned a net profit of $12 billion.
"By selling all the remaining Citigroup shares today, we had an opportunity to lock in substantial profits for the taxpayer and avoid future risk. With this transaction, we have advanced our goals of recovering TARP funds, protecting the taxpayer and getting the government out of the business of owning stakes in private companies,” said Tim Massad, acting assistant secretary for financial stability.
Treasury still holds warrants for the common stock that were issued as part of the bank's participation in Treasury programs.
The announcement comes less than a week after the Treasury announced it had made an additional $1.8 billion in a second sale of General Motors stock. The government has made a total of $13.5 billion in the sale of GM stock. However, it originally invested $50 billion in the car company and about $23.1 billion has been paid back thus far.