WASHINGTON — The Treasury Department said Monday that its first sales of Citigroup stock (C) will cover up to 1.5 billion shares.
That would amount to about 20% of the 7.7 billion shares of Citigroup common stock the government owns.
It received the shares as compensation for the financial support it extended to the bank during the height of the financial crisis.
In a statement Monday, Treasury said it plans to proceed with the sales of the Citigroup common stock "in an orderly fashion under a pre-arranged trading plan with Morgan Stanley, Treasury's sales agent."
Treasury did not disclose in its brief announcement exactly when the stock sales would begin or how long the sales would last.
Treasury said Morgan Stanley has authority to make the sales "under certain parameters" and Treasury expected to give the company the authority to sell additional shares after the initial 1.5 billion shares had been sold.
The sales should earn a tidy profit for the government, which bought the common stock in the summer of 2009 at $3.25 a share. Citigroup closed Friday at $4.86 a share.
At the moment, the Treasury owns 27% of the company in return for its investment of $25 billion.
Treasury had announced last month that it would soon begin selling its Citigroup stock and that it planned to sell the shares over the course of this year.
Citi, one of the hardest-hit banks during the financial crisis, received $45 billion in taxpayer bailout money. That was one of the largest rescues under the goverment's $700 billion bailout fund, known as the Troubled Assets Relief Program.
Of the $45 billion, $25 billion was converted to a government ownership stake in Citi last summer and the bank repaid the other $20 billion in December.