In another attempt to aid the ailing banking giant Citigroup, the government announced today that it will buy more stock in the company and increase the amount of its ownership from 8% to 36%.
Taxpayers have already put $45 billion into the firm and the new arrangement won't involve more taxpayers' money at this time. As a means of repaying $25 billion of the money the government has already lent Citigroup, the company will issue the government shares of its common stock, which give the government an ownership stake.
The company must place $27 billion of shares with private investors. Existing shareholders would control about 26% of the company.
Citigroup CEO Vikram Pandit will stay in his position but the company agreed to replace five of its 15 directors with individuals who have no ties to the company.