HOW BAD ARE THINGS AT CITI?

Citigroup lost $9.83 billion in Q4, in part due to $18 billion in writedowns. Now, after raising over $14.5 billion in new funding from Saudi Prince Alaweed, the Kuwait Investment Authority, and the Abu Dhabi Investment Authority, it seems Citi needs more capital or it is in big trouble.

From MarketWatch:

Sameer Al Ansari, Chief Executive of Dubai International Capital told delegates at a private equity conference that it will take more than the combined efforts of the Abu Dhabi Investment Authority, the Kuwait Investment Authority and Saudi investor Prince Alwaleed bin Talal to save the bank.

"It's going to take more than that to rescue Citi," Ansari said. He added that more write downs are expected and that Gulf investors would be required to bolster Citi.

Al Ansari said "it would take a lot more money to rescue Citigroup." A spokesperson for Citi was unable to comment immediately when called Tuesday.

CITIGROUP SELLS 4.9% STAKE TO ABU DHABI FUND

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.