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Citi to Get Investment from Saudi Prince, China: WSJ

Reuters with CNBC
Friday, 11 Jan 2008 | 6:13 PM ET

Saudi Arabian Prince Alwaleed bin Talal, Citigroup'slargest individual shareholder, will inject new cash to help America's biggest bank grapple with heavy mortgage market losses, sources have told CNBC.

Tomorrow's Trades #1
It's D-Day for Wall Street, with CNBC's Charlie Gasparino and the Fast Money team.

Alwaleed has owned his Citi stake since the early 1990s and helped engineer a previous rescue plan for the bank more than a dozen years ago. According to a report on the Wall Street Journal's Web site, he is likely to keep his total stake in the bank below 5 percent to avoid regulatory scrutiny. (See Fast Money's discussion of Citi's prospects in the video to the left).

In addition, the China Development Bank is expected to invest $2 billion in Citigroup , the Wall Street Journal reported, adding other investors could inject additional capital.

Altogether, the bank is hoping to raise $8 billion to $10 billion from a number of investors, including the Chinese bank and Alwaleed, the newspaper said.

In November, Citi accepted $7.5 billion in new capital from the The Abu Dhabi Investment Authority only weeks after its former chief executive officer, Charles Prince, was forced out amid news of the heavy losses related to bad bets on mortgage securities and an ailing housing markets.

Citigroup spokeswoman Shannon Bell declined to comment.

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