Citigroup to sell $4.5B of stock

The transaction also includes an over-allotment option of up to 17.8 million additional shares of common stock.

Citigroup Inc. is raising $4.5 billion through the sale of new shares of stock as the company tries to rebound after recording large losses related to risky investments.
The offering of 178 million shares of common stock will be priced at $25.27 per share.
The transaction also includes an over-allotment option of up to 17.8 million additional shares of common stock.
The capital is 50% larger than the $3 billion that the New York-based company said that it would raise Tuesday.
“We were pleased to increase the offering size to $4.5 billion in response to strong demand from a broad base of investors,” said Citigroup chief financial officer Gary Crittenden, according to a statement.
“This optimizes our capital structure and further strengthens our balance sheet.”
The new capital will help offset the growing losses that the bank has taken as the mortgage and credit markets have floundered since the middle of 2007.
Earlier this month, Citigroup said that it lost $5.1 billion during the first quarter (InvestmentNews, April 18) , after the bank recorded a $9.8 billion loss in the fourth quarter of 2007 (InvestmentNews, Jan. 15).
Citigroup has received $12.5 billion from the Government of Singapore Investment Corporation Private Ltd., the Kuwait Investment Authority in Kuwait City and shareholder Prince Alwaleed bin Talal of Saudi Arabia in January.
It also received a $7.5 billion investment from United Arab Emirates based Abu Dhabi Investment Authority in November.