GIC $11B Stake in Citi Bang WIPED OUT! Fxxx Lee Con You!

[makapaaa]

<TABLE cellSpacing=0 cellPadding=0 width=452 border=0><TBODY><TR><TD vAlign=top width=452 colSpan=2>Published November 25, 2008

</TD></TR><TR><TD vAlign=top width=452 colSpan=2>US govt rescue dilutes GIC's Citi stake
However, GIC's rights and dividends from preferred shares still unclear

By CONRAD TAN
<TABLE class=storyLinks cellSpacing=4 cellPadding=1 width=136 align=right border=0><TBODY><TR class=font10><TD align=right width=20> </TD><TD>Email this article</TD></TR><TR class=font10><TD align=right width=20> </TD><TD>Print article </TD></TR><TR class=font10><TD align=right width=20> </TD><TD>Feedback</TD></TR></TBODY></TABLE>(SINGAPORE) The US government's massive capital injection into Citigroup will dilute the Government of Singapore Investment Corp's earlier investment in the bank, although it was unclear yesterday whether the bailout would trigger any changes in GIC's rights or a cut in the dividend that it receives. When contacted, GIC declined to comment.

GIC, which manages Singapore's foreign reserves, bought US$6.88 billion worth of convertible preferred shares in Citi in January.
GIC said at the time that the preferred shares, if converted to ordinary equity, would increase its stake in Citi to about 4 per cent from an existing 0.3 per cent.
The preferred shares pay quarterly dividends at a rate of 7 per cent a year, and the dividends on the preferred stock must be paid before any dividends can be paid to Citi's ordinary shareholders.
But now that the US government has forced the bank to slash its dividend to ordinary shareholders to no more than one US cent each quarter, it is not clear if the dividend payments to Citi's existing preferred shareholders such as GIC could be reduced.
According to a stock exchange filing by Citi in January describing the preferred shares that it sold to GIC and other investors, 'dividends on shares of the convertible preferred stock will not be mandatory', but if Citi does not pay dividends on the preferred stock, it cannot then pay dividends to its ordinary shareholders.
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</TD></TR></TBODY></TABLE>That agreement also allows Citi to issue additional preferred shares ranking equally with or junior to the shares that it issued GIC and other investors who bought Citi preferred stock at the time, without seeking their consent.
The US government said on Monday that it would insure up to US$306 billion of Citi's troubled assets and inject US$20 billion in capital into the bank.
In exchange for the bailout, Citi will issue US$27 billion worth of preferred shares that pay a quarterly dividend at a rate of 8 per cent a year.
The government will also receive warrants for US$2.7 billion of ordinary shares.
The preferred shares issued to the US government are superior to those that GIC bought in January in at least two respects - the dividend is higher and it is cumulative, which means that any unpaid dividends will accumulate each quarter until they are paid.
The preferred shares that GIC bought are non-cumulative, which means that Citi has no obligation to make good on any missed dividend payments if it chooses not to pay them in a given quarter.
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[tommyh]

Well US Gov not only invested $25B when Citi is at $3.50 a share it also backed $300B in liability.

So of course US G stands ahead of the line. But I suspect that GIC will get something back for their money eventually but forget about their 7% return on convertible shares.

Put it this way, without US Government, Citi would probably be dead in a matter of weeks.

 

[theblackhole]

dead fish on dry land still trying to salvage.aiyohyoh this type of salvage cannot liao lah.better cash out and run for your lives.massive collapse is just around the corner.

 

[DIVISION1]

Please do not jump the gun. I believe our investment was sound in view of the facts at that time. While there may be some adjustments to our profit and loss forecasts, it is not as dire as some of you portray it to be. In addition, the learning curve has improved for our leaders to ensure even greater multiplier profits in the subsequent investments. At most, this is just a premium invested to identify excellent returing investments. Singapore cannot survive by making fixed deposit investments overseas.

 

[congo9]

Please do not jump the gun. I believe our investment was sound in view of the facts at that time. While there may be some adjustments to our profit and loss forecasts, it is not as dire as some of you portray it to be. In addition, the learning curve has improved for our leaders to ensure even greater multiplier profits in the subsequent investments. At most, this is just a premium invested to identify excellent returing investments. Singapore cannot survive by making fixed deposit investments overseas.

HOw do you know that our investment is still sound ? Look at ML , Citibank and swiss bank will do.

You mean they are paid million a yr just to let them use our money to "LEARN" ? My god ! Remember you are the Elite and Divison 1 !!!!!!! Why they learn so slow ? Waren Buffett went in a yr later but he still got kenna burnt badly ! I don think our scholar are nowwhere near his standard ! Remember , the money belong to singaporean, not PAP !

Singapore can not only survive but will thrive under the new 2 party system of the future.

 

[2lanu]

One thing I pissed with white scum and their lackeys is they never take OWNERSHIP. When thing goes well, they jump out to get the credits, but when thing not working excuses like, "external factor", "honest mistake", "what happen had happened" etc.

 

[Seee3]

I have enjoyed reading your comments. If you are being sarcastic, well done. If you are seriously trying to put the record right, then it is miserable.

 

[pfingo]

how to convert preferred stock to common eventually? any finance gurus here?

 

[littlefish]

HOw do you know that our investment is still sound ? Look at ML , Citibank and swiss bank will do.

You mean they are paid million a yr just to let them use our money to "LEARN" ? My god ! Remember you are the Elite and Divison 1 !!!!!!! Why they learn so slow ? Waren Buffett went in a yr later but he still got kenna burnt badly ! I don think our scholar are nowwhere near his standard ! Remember , the money belong to singaporean, not PAP !

Singapore can not only survive but will thrive under the new 2 party system of the future.

I have been following Division1's posts. They actually seem rather sarcastic if you read them again and I have a feeling he is Moneyhelp from the old Dephi forum.

 

[DIVISION1]

I have been following Division1's posts. They actually seem rather sarcastic if you read them again and I have a feeling he is Moneyhelp from the old Dephi forum.

Oh dear, I am being sincere. In this forum, everyone seems to have their own way of interpreting written words. I do not know who is moniker Moneyhelp. I am Division1 and that is who I am. Please, please.

 

[BBBBBB80]

the learning curve has improved for our leaders.

You are indeed generous.

Giving away multi-million dollar salaries pegged to the top private sector earners yet do not have to have any of their knowledge, experience, expected performance and accountability when things go wrong. and the best is they get to play with the peoples' money.