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Saudi prince comes to rescue of Citigroup
James Doran in New York
Thu 20 Nov 2008 15.07 GMT
Saudi Arabian prince Alwaleed bin Talal has come to the rescue of Citigroup with a much-needed cash injection today.
The surprise turnaround ended a two-year selloff that has wiped more than $200bn (£135bn) from the bank's market value.
The Saudi prince will increase his stake from about 4 to 5% in the coming days.
The move initially filled investors with confidence and sparked a buying spree before the bell. The shares surged 25 cents to $6.65, but then fell back to tumble by another 17.5%. Yesterday, they fell more than 22% in a single session while the stock is down more than 90% since 2006.
Based on Wednesday evening's closing price, the prince plans to invest about $349m of his fortune in Citigroup shares.
In a statement released at 9am in New York, Talal said he believed Citi's shares were "dramatically undervalued" and expressed "full and complete support to Citi management" including the embattled chief executive, Vikram Pandit.
He said the New York-based bank was "taking all the necessary steps to position the company to withstand the challenges facing the banking industry and the global economy".
Talal said he was "fully confident that Citigroup's universal banking model and global franchise will make it a long-term winner in the financial services industry".
The prince has long been the biggest investor in Citigroup and has a close relationship with Sandy Weill, the bank's founder and former chief executive. His stakeholding in the bank was reduced in 2007 and again earlier this year as Citi raised more than $50bn in new capital from sovereign wealth funds and other investors.
On Monday, Pandit announced 52,000 layoffs in the biggest round of banking job cuts in Wall Street history.
https://www.theguardian.com/business/2008/nov/20/citigroup-bank-saudi-arabia
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