The Abu Dhabi Investment Authority (ADIA), the country’s largest sovereign wealth fund, is to convert bonds it holds in Citigroup into shares at more than seven times their current value.
The deal, which will come in four stages beginning in March, is the result of a two-year-old agreement between ADIA and Citi that was designed to inject new capital into the US bank, which was then facing liquidity problems.
Under the original agreement, ADIA would have been left with a 4.9 per cent shareholding in Citi, but this has since been diluted by the US government, which took a 36 per cent share in the bank earlier this year, and other investors.
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