The Government of Singapore Investment Corporation (GIC) is pumping 6.8 billion US dollars into battered American banking giant Citigroup, it said Tuesday night.
Citigroup reported 9.83 billion US dollars in net losses for the fourth quarter of 2007, its first quarterly loss in 16 years, resulting from the credit crisis rocking the global financial system.
GIC is investing through a private offering of convertible proferred securities.
"Citigroup is an excellent addition to GIC's portfolio as it is one of the largest banks in the world," Tony Tan, GIC deputy chairman and executive director said in a statement.
GIC is confident in Citigroup's board of directors, who have taken "decisive action to strengthen the balance sheet and profitability of the bank," he said.
The investment, with a limited downside, can be converted to shares which would bring GIC's holdings to some 4 per cent of its enlarged share capital.
That would make GIC, which currently owns 0.3 per cent of Citigroup, one of the bank's largest individual shareholders.
GIC's investment is the largest in a new round of fund-raising that netted 12.5 billion US dollars from private investors, including the Kuwait Investment Authority, Saudi Prince Alwaleed bin Talal and asset management firm Capital Research & Management.
GIC bought a 9 per cent stake less than a month ago in the Swiss bank UBS, another victim of the sub-prime meltdown. ( Dpa )