SINGAPORE - The Government of Singapore Investment Corp. (GIC) yesterday said it made a US$1.6bn profit on its $6.88bn investment in troubled bank Citigroup.
The news came as the sovereign wealth fund announced it had reduced it's holding in Citigroup to 5% from 9%.
In an announcement yesterday, the GIC said it had exchanged its holdings of convertible preferred stock for Citigroup common stock at a conversion price of $3.25 per share.
"This exchange resulted in GIC having a shareholding stake exceeding 9% in Citigroup. Following the exchange, GIC has reduced its stake to below 5% through open market sales. This was the level GIC had intended when it invested in Citigroup through the convertible security," the fund said in a release.
GIC chief investment officer Ng Kok Song said: "GIC has made a profit of US$3.2bn on our investment of US$6.88 billion in Citigroup."
He said a $1.6bn profit has been realised, but the fund's remaining investment in the bank has a $1.6bn valuation profit at the September 21 closing price of $4.43 per share.
GIC said it would continue to invest in Citigroup and that the fund was "confident of its long-term prospects".
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