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Treasury to Sell Citi Stake

Government could potentially earn $7 billion on its crisis-driven investment in the bank.

The U.S. Department of the Treasury has announced its plan to sell all of its approximately 7.7 billion shares of Citigroup over the course of 2010 subject to market conditions. Treasury purchased the stock in June 2009. The Treasury Department has hired Morgan Stanley to handle the sale of Citi stock. The government is likely to sell the shares slowly, so as not to adversely affect the stock's price. If the price hold's at today's price of a little over $4 a share, the government would reap a profit of about $7 billion on its $25 billion investment in Citi, which was part of the government's bank bailout program.

This planned sale does not affect Treasury's holdings of Citigroup trust preferred securities or warrants for its common stock.

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