UPDATE 2-Citigroup sells $4.5 bln stock, 50 pct above plan
April 30th, 2008 | by admin |(Recasts. adds comments from analysts, other details)
By Jonathan Stempel and Dan Wilchins
NEW YORK, April 30 (Reuters) - Citigroup Inc (C.N: Quote, Profile, Research) said onWednesday it sold $4.5 billion of common stock, 50 percent morethan originally expected, bolstering the largest U.S. bank’sbalance sheet after billions of dollars of subprime mortgagewrite-downs and other credit charges.
The bank’s stock fell 83 cents or 3.2 percent, to $25.49 inmorning trading, following the sale of 178.1 million shares at$25.27 each, or 4 percent below the Tuesday closing price. Theoffering dilutes holdings of existing shareholders.
Citigroup said it may boost the offering to $4.95 billionto meet demand. Chief Financial Officer Gary Crittenden saidthe bank Increased the offering from $3 billion “in response tostrong demand from a broad base of investors.”
Since late last year, Citigroup has raised more than $40billion of capital, including $10.5 billion over the lastweek-and-a-half. The bank has suffered more than $46 billion ofcredit losses and write-downs since the end of June, and lostclose to $15 billion in the last two quarters.
Meredith Whitney, an Oppenheimer & Co analyst who lastOctober correctly foresaw Citigroup’s capital needs, said thebank still needs to raise $10 billion to $15 billion more, orshed several hundred billion dollars of assets.
“The fact that the company raised such a small amount ofcapital at this time confounds us,” Whitney wrote on Tuesdayevening, after Citigroup set plans to raise $3 billion.
Whitney said Citigroup may need to cut its dividend again,following January’s 41 percent reduction. Even with January’scut, Citigroup’s annual dividend payout would exceed $6.5billion.
