GIC: Citigroup Stake To Be Diluted To About 4% After Citi Offering

Government of Singapore Investment Corp., or GIC, said Friday that its stake in Citigroup Inc. (C) will be reduced to about 4% from 4.9% after the latest round of capital raising by the U.S. bank.

"GIC will continue its investment in Citigroup as we are confident of its long-term prospects," GIC spokeswoman Jennifer Lewis said in a statement.

As part of its efforts to pay off the government, Citigroup said it would raise $20 billion in equity, in part by selling $17 billion in common stock at $3.15 a share.

"As a shareholder, GIC views Citigroup's plan to repay the U.S. government as a positive development in the company's recovery," GIC spokeswoman said.

In September, GIC said it cut its stake in Citigroup to below 5% after it exchanged its convertible preferred stock in the bank to common stock and made a profit of US$1.6 billion over the conversion price as part of the transaction.

P.R. Venkat, Dow Jones Newswires; [phone]; [e-mail]