Citigroup looks to Saudi Prince, China for fresh funding

Our Corporate Bureau
12 January 2008

Mumbai: Citigroup, the largest US bank, is expected to get fresh injection of funds - to the tune of $8-10 billion - as it bids to come out of the subprime loan crisis.

Saudi Prince Alwaleed bin Talal, Citigroup's largest individual shareholder, and China Development Bank will inject fresh funds to rescue Citi from heavy mortgage market losses, the Wall Street Journal reported.

Alwaleed, who owned a stake in Citi since the early 1990s and backed a previous rescue plan for the bank more than 12 years ago, is likely to keep his total stake in the bank below 5 per cent to avoid regulatory scrutiny, the report said.

While China Development Bank is expected to invest $2 billion in Citigroup, other investors may inject additional capital.

The bank is hoping to raise $8 billion to $10 billion in all from a number of investors, including the Chinese bank and Alwaleed, the report said.

Citi had already agreed to sell up to 4.9 per cent of its equity stock worth $7.5 billion to The Abu Dhabi Investment Authority in November.