From The New York Times:
Citigroup announced last night that it was selling a $7.5 billion stake to a Middle Eastern sovereign fund in the latest bid to shore up its balance sheet.
The fund, the Abu Dhabi Investment Authority, has agreed to buy a 4.9 percent equity stake in a complex transaction that has been approved by federal regulators. It will have no role in the management or governance of Citigroup, nor any presence on Citigroup’s board.
Abu Dhabi’s 4.9 percent stake will make it Citigroup’s single largest shareholder, overtaking Prince Walid bin Talal of Saudi Arabia. He has owned close to a 5 percent stake since the early 1990s, when he made a similar investment to bail out the company. Together, their holdings will mean that nearly 10 percent of the Citigroup will be owned by Middle Eastern investors.
“This investment reflects our confidence in Citi’s potential to build shareholder value,” said A.D.I.A.’s managing director, Sheikh Ahmed bin Zayed al-Nahyan.
The investment from Abu Dhabi underscores Citigroup’s precarious capital position, and also highlights the growing petrodollar wealth of Mideast countries, which are buying up assets and taking stakes in numerous American companies.
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